Future of Quantum in Finance

Alex Miller, Head of Citi Institute in conversation with Christian Papathanasiou, Chief Architect for Quantum Bitcoin discussing the implications of quantum computing in finance. This conversation highlights the urgent need for both public and private sectors to prepare for the advent of powerful quantum computers. The potential disruption to cryptography requires proactive planning and implementation of post-quantum security measures.

Key takeaways:

• What is Quantum Computing? Quantum computing is the next generation of computing, moving beyond silicon-based transistors to leverage the laws of physics. Current quantum computers are specialized, designed for specific scientific tasks rather than everyday applications. Quantum computers can solve problems beyond the capabilities of traditional computers. For example, they excel at factoring large numbers, a process difficult for traditional computers but crucial for cryptography.
• Quantum Computing and Cryptography: Quantum computers pose a threat to current cryptographic systems. Their ability to factor large numbers could break the encryption protecting much of our digital world, including e-commerce and data security.
• Policy and Corporate Response: Governments are recognizing the quantum threat and taking action. Examples include: The US Trade Secretary prioritizing quantum policy, the Central Bank of Israel requiring quantum readiness plans from retail banks and the EU mandating post-quantum cryptography upgrades for institutions by 2030. Quantum Break refers to the point when quantum computers become powerful enough to break current encryption. Estimates suggest this could happen as early as 2027. All companies should be developing quantum migration plans. This involves upgrading systems to post-quantum cryptography. This is crucial for protecting data and maintaining security in a post-quantum world. Elevating this to a board-level discussion is recommended.
• Quantum Computing and Digital Assets: Bitcoin's cryptography, specifically ECDSA, is vulnerable to quantum computers. The post-quantum cryptographic solutions being developed for Bitcoin can also be applied to other blockchains, custody solutions, and even national digital currencies (CBDCs).
• The Future of Quantum Computing: Quantum computing technology is advancing rapidly and is expected to accelerate further. The development of error-corrected "logical qubits" is key to this progress. While currently specialized, quantum computing is becoming more accessible, similar to the trajectory of traditional computing. Many companies are investing heavily in quantum computing development.