HSBC Pilots Quantum Security for Digital Gold Trading

HSBC has successfully trialled what it says is the first application of quantum-secure technology for trading tokenised physical gold, the latest step in the bank’s work to protect critical applications from potential future quantum computing attacks.

Last year, HSBC claimed a first with a quantum-protected FX trade, it also started to offer tokenised physical gold to investors via distributed ledger technology (DLT), and launched a retail gold token for fractional ownership of the precious metal.

The bank says it also tested the interoperability of its gold tokens using post-quantum cryptography (PQC) to move digital assets safely across distributed ledgers via secure networks, addressing clients’ evolving needs and regulations. This included the capability to convert HSBC’s gold tokens into ERC-20 fungible tokens, thereby enhancing distribution and interoperability with other DLTs and digital wallets.

As part of the quantum pilot, quantum computing company Quantinuum used PQC algorithms and its Quantum Origin quantum randomness technology to demonstrate holistic protection of digital assets such as HSBC gold tokens from a quantum computing attack, and prevent “store now, decrypt-later” (SNDL) cyber incidents. The bank explains that SNDL is a cyber-technique that has the aim of stealing sensitive data now and then storing it to decipher that data later, using powerful quantum computers in the future.

“HSBC was the first international bank to offer tokenised physical gold and is now building on that innovation with cutting-edge cybersecurity protection for the future,” says Philip Intallura, global head of quantum technologies, HSBC. “This pilot successfully demonstrated the viability of deploying these advanced technologies for a real-world business environment.”

Ilyas Khan, Quantinuum founder and chief product officer, adds, “As long-time partners in exploring commercial quantum applications, HSBC and Quantinuum are together building the next generation of financial services featuring quantum-hardened defences harnessing the power of today’s quantum computers to safeguard sensitive data now and into the future.”