Banks Face 2027 Deadline to Migrate from Ethereum's BLS Signature Scheme

Ethereum's post-quantum roadmap has set a deadline for banks to migrate their systems by 2027, but few are aware of this looming threat. According to Thomas Brunner, Sygnum Bank's Head of Custody and Staking, banks face a multi-year timeline before they can complete the necessary inventory and validation processes.

Brunner notes that the current BLS signature scheme used by Ethereum validators is stateless, allowing for unlimited signings without any issues. However, when transitioning to hash-based alternatives like leanXMSS, the validator will need to use one-time keys, which requires a different approach to signing.

The NIST SP 800-208 standard requires stateful hash-based signing to occur within a hardware module and prohibits the export of private key material. This creates a conflict for banks, as they normally duplicate the signing environment or roll it backward in time, but this would reuse the index and compromise security.

Ethereum's proposed validator-key registry aims to cap the number of post-quantum keys processed per slot, with researchers currently using 16 registrations per slot. However, a last-minute rush to register could overload the queue and leave validators unable to sign once BLS is deprecated, threatening finality itself.