The U.S. Securities and Exchange Commission (SEC) is considering a proposal to protect crypto assets from the increasing threats of quantum computing. Experts raise alarm that quantum technology advances could compromise the encryption that secures cryptocurrencies like Bitcoin and Ethereum.
SEC’s Crypto Protection Proposal
The SEC’s Crypto Asset Task Force has been presented with a proposal called the “Post-Quantum Financial Infrastructure Framework.” The paper outlines a roadmap for protecting digital assets from future quantum computing attacks. Daniel Bruno Corvelo Costa, who presented the proposal, emphasizes the urgent need for a systematic response to counter the threats of quantum decryption.
Costa warns that if we do not take steps to quantum-proof crypto assets, trillions of dollars in digital assets could be at risk. The proposal advocates for a transition to quantum-resistant cryptographic standards to enhance the security of the U.S. digital asset ecosystem.
Quantum Computing Breakthroughs and Threats
Recent quantum computing breakthroughs have raised alarm bells in the cryptocurrency community. IBM’s 133-qubit quantum computer has successfully cracked a six-bit elliptic curve cryptographic (ECC) key, marking spectacular progress. The breakthrough does not directly threaten Bitcoin or Ethereum, as both use ECC-256, which remains out of reach. However, it highlights potential vulnerabilities that could be exploited in the future.
Ethereum co-founder Vitalik Buterin has raised alarm over a 20% chance that quantum computers will crack modern cryptography by 2030. This concern is amplified by the “harvest now, decrypt later” strategy, where attackers collect encrypted data today to unlock it once quantum technology matures.
Preparing for “Q Day”
Experts have called the day when quantum computers can decrypt current encryption “Q Day.” David Carvalho, CEO of Naoris Protocol, predicts that quantum technology could pose a real threat to Bitcoin’s encryption in under five years. He stresses that proactive measures are necessary to protect digital wallets and blockchains.
Some governments, like El Salvador, have already begun taking steps to minimize exposure to quantum threats. El Salvador recently split its Bitcoin treasury into several addresses, reducing the risk of reusing public keys.
Financial Institutions Hedge Against Quantum Threats
Financial institutions are not underestimating the quantum threat. Between 2020 and 2024, global banks made 345 blockchain investments to enhance security against quantum attacks. Some institutions, like HSBC, have experimented with post-quantum cryptography for tokenized assets.
These steps indicate that traditional finance views quantum defense as a future necessity, not speculative hype.
As quantum technology continues to evolve, the need for a quantum-resilient digital asset ecosystem becomes a necessity. Actors in the cryptocurrency ecosystem must remain vigilant and proactive to protect their assets from new threats.
