Growing concerns over Bitcoin and Ethereum’s vulnerability to quantum computing
The US Securities and Exchange Commission’s (SEC) Crypto Assets Task Force is reviewing a new proposal urging regulators and developers to prepare the digital asset market for the coming era of quantum computing. Experts warn that current cryptographic protections securing Bitcoin, Ethereum, and other cryptocurrencies could be broken within the next decade.
Quantum risk to trillions in digital assets
The submission, titled the Post-Quantum Financial Infrastructure Framework (PQFIF), outlines a roadmap for transitioning the cryptographic foundations of digital assets to quantum-resistant standards. It warns that “cryptographically relevant quantum computers could break the fundamental security that protects trillions of dollars in assets, leading to systemic risk, catastrophic investor losses, and a complete erosion of market confidence.”
A central concern is the “Harvest Now, Decrypt Later” threat, where attackers collect encrypted data today in anticipation of future breakthroughs in quantum computing. Once these machines mature, adversaries could retroactively decrypt sensitive financial information.
Call for early safeguards
The framework recommends automated vulnerability testing of exchanges and custodians, with a priority on institutional wallets that hold significant sums. It also supports a phased migration combining classical encryption with post-quantum methods, aligned with standards finalized by the National Institute of Standards and Technology (NIST) in 2024, including FIPS 203–205 and HQC.
One section highlights the urgency: “Establishing a quantum-resilient digital asset ecosystem is needed to secure investor assets and ensure the long-term integrity of US capital markets.” Experts caution that “Q-Day,” the point when quantum computers can crack Bitcoin’s encryption, could arrive as early as 2028.
Industry response and Bitcoin upgrade proposals
In parallel, Bitcoin developers have proposed a Bitcoin Improvement Proposal (BIP) called “Post Quantum Migration and Legacy Signature Sunset.” The plan would gradually restrict transactions to vulnerable addresses and eventually freeze older wallets at risk of quantum attack.
The SEC’s task force is expected to evaluate these recommendations in its ongoing review. With trillions in digital wealth potentially exposed, regulators and developers are facing mounting pressure to act before quantum technology reaches critical maturity.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.