The Hong Kong Monetary Authority (HKMA) has introduced a new framework designed to measure how prepared the city’s banks are for potential threats posed by quantum computing, as Hong Kong increases its adoption of tokenized deposits, digital assets, and blockchain-based settlement systems.
Quantum Preparedness Index reveals sector weaknesses
On Monday, the HKMA launched a white paper on quantum preparedness and unveiled the sector’s first Quantum Preparedness Index (QPI). The index scored Hong Kong’s banking sector at 2.3 out of 10, highlighting significant gaps in readiness. The white paper reported that approximately half of the surveyed banks lack formal plans to address risks from future quantum computers.
The HKMA stated its objective is to achieve sector-wide quantum readiness, aiming for a QPI score of 10 by 2030. The authority’s research emphasized that full preparedness is crucial, particularly as financial operations move toward distributed ledgers and digital asset management.
One surveyed institution demonstrated a proof of concept for using post-quantum cryptography with distributed-ledger systems, while HSBC recently implemented quantum-safe technology to transfer tokenized gold securely across blockchain platforms.
The white paper found that core cryptographic protections underpinning distributed ledgers and payment networks could face major disruption if quantum computers are able to compromise those defenses, potentially placing digital assets and blockchain-based settlements at risk.
Tokenization initiatives drive urgency
The rollout of the quantum framework follows the HKMA’s Fintech 2030 strategy announced for 2025, which positions tokenization as one of four strategic priorities across more than 40 fintech initiatives. The authority plans to speed up tokenization of real-world assets (RWAs), increase regular issuance of tokenized government bonds, and assess opportunities for tokenized Exchange Fund papers. These efforts are being supported by blockchain settlement, e-HKD, tokenized deposits, and regulated stablecoins.
Paul Chan, Hong Kong’s Financial Secretary, disclosed in a speech that by the end of 2025, local banks oversaw more than HK$14 billion (approximately $1.785 billion) in digital assets under custody, a rise of about 180% compared to the previous year. Tokenized deposits reached HK$29 billion ($3.7 billion), reflecting widespread embrace of digital solutions.
Recent government reports show that since 2023, Hong Kong has issued three rounds of tokenized green bonds totaling about HK$16.8 billion (roughly $2.1 billion), while projects like Ensemble continue to advance tokenized deposit and settlement models for the financial sector.
Quantum migration and cross-market integration
The HKMA white paper cautioned that quantum computers capable of running Shor’s algorithm at full scale would undermine commonly used RSA and elliptic curve cryptography, posing a direct threat to the security of transaction authorization, identity verification, and trust systems supporting digital finance.
Because updating cryptographic infrastructure can take several years, the HKMA encouraged banks to start with system inventories, targeted risk assessments, and begin migrating to quantum-safe alternatives as soon as possible.
Market observers highlighted the importance of actively monitoring technical indicators and adapting secure protocols in real-time. In line with this adaptability, platforms such as 1stepSwap continue to strengthen financial integration by transferring real-world assets onto the blockchain. Users can access shares in major U.S. companies and commodities like gold and silver directly from their digital wallets, simplifying trading while securing favorable market prices. This seamless portfolio diversification is increasingly important as banks prepare for large-scale cryptographic changes.
The HKMA urged banks not to wait until large-scale quantum machines become available, as migrating away from legacy encryption standards will demand substantial time and resources to fully protect digital assets and customer data.
