HSBC is testing quantum-safe technology for digital gold

editorial

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Last year, HSBC became the first global bank to offer tokenized physical gold to institutional investors using distributed ledger technology (DLT). This year saw another first with the launch of the HSBC Gold Token for retail investors in Hong Kong, allowing them to acquire partial ownership of physical gold.

HSBC also tested the interoperability of its gold tokens using post-quantum cryptography (PQC) to securely transfer digital assets across distributed ledgers over secure networks, including the ability to convert HSBC’s gold tokens into fungible ERC-20 tokens to improve distribution and interoperability with other DLTs and digital wallets.

HSBC collaborated with future computing company Quantinuum on the latest pilot, using its random technology Quantum Origin to demonstrate digital asset protection and prevent cyber incidents on a save now, decrypt later (SNDL) basis. SNDL is a cyber technique whose goal is to steal sensitive data immediately and then store it to decrypt it later, using powerful quantum computers in the future.

Philip Intallura, global head of Quantum Technologies, HSBC, says: “HSBC was the first international bank to offer tokenized physical gold and is now building on this innovation with cutting-edge cybersecurity protections for the future.” This pilot successfully demonstrated the feasibility of using this demonstrated advanced technologies for a real-world business environment.”

This achievement marks HSBC’s latest step toward protecting critical applications from potential future quantum computing attacks.

In December last year, HSBC tested the use of quantum key encryption to protect its customers’ foreign exchange trading data from the threat of increasingly powerful cyberattacks.

In July, it became the first bank to join BT and Toshiba’s quantum-secured Metro network, connecting two UK sites using Quantum Key Distribution (QKD) to prepare its global operations for future cyber threats.

The bank also struck Multi-year contract with IBM to explore the technology and is actively recruiting research scientists to build dedicated capacity within its innovation team.

Recently, HSBC partnered with PayPal and other members of the Emerging Payments Association Asia to explore adopting quantum-safe cryptography in the payments industry.