HSBC has successfully trialed quantum-secure technology for buying and selling tokenized physical gold. This marks a significant advancement in protecting digital assets against future quantum computing attacks. Last year, HSBC became the first global bank to offer tokenized physical gold to institutional investors using distributed ledger technology (DLT).
DLT is a decentralized digital system for recording transactions across multiple computers. It enhances transparency and security in financial transactions. Philip Intallura, Global Head of Quantum Technologies at HSBC, said “HSBC was the first international bank to offer tokenized physical gold and is now building on that innovation with cutting-edge cybersecurity protection for the future.”
This year, HSBC expanded its offering with the launch of HSBC Gold Token for retail investors in Hong Kong.
This product enables fractional ownership of physical gold, making gold investment more accessible. As part of the trial, HSBC tested the interoperability of its gold tokens using post-quantum cryptography (PQC) algorithms. These algorithms are designed to withstand attacks by quantum computers, which are expected to be capable of breaking many current encryption methods.
The bank demonstrated the ability to convert HSBC’s gold tokens into ERC-20 fungible tokens, a technical standard for tokens on the Ethereum blockchain.
Quantum-safe advancements for gold trading
This conversion enhances the tokens’ utility and interoperability within the broader digital asset ecosystem.
To achieve quantum-safe security, HSBC partnered with Quantinuum, a leading quantum computing company. Quantinuum employed PQC algorithms and its Quantum Origin quantum randomness technology to showcase comprehensive protection of digital assets from quantum computing attacks. Ilyas Khan, Quantinuum founder and Chief Product Officer, said “As long-time partners in exploring commercial quantum applications, HSBC and Quantinuum are together building the next generation of financial services featuring quantum-hardened defenses harnessing the power of today’s quantum computers to safeguard sensitive data now and into the future.”
The trial also addressed the threat of “store now, decrypt-later” (SNDL) cyber incidents.
SNDL is a technique where malicious actors steal sensitive data with the intention of decrypting it later using powerful quantum computers that do not yet exist. The successful trial of quantum-safe technology for tokenized gold trading has significant implications for financial services. As digital assets become increasingly mainstream, robust security measures that can withstand future technological advancements are paramount.
The integration of quantum-safe technology with tokenized assets also opens up new possibilities for cross-platform interoperability. Philip Intallura concluded “By combining tokenized assets with quantum-safe technology, we’re creating a new standard for security and innovation in digital finance. This isn’t just about protecting assets; it’s about building trust in the digital financial ecosystem of the future.”
