Hong Kong Banks Face Quantum Threats Amid Tokenization Push

The Hong Kong Monetary Authority (HKMA) has introduced a framework to assess banks' preparedness for quantum-computing threats as the city expands its use of tokenized deposits, digital assets, and blockchain settlement.

According to a white paper released by the HKMA, around half of surveyed institutions had no formal post-quantum planning in place. The regulator aims to achieve full sector readiness, represented by a Quantum Preparedness Index (QPI) score of 10, by 2030.

The development comes as Hong Kong moves more traditional financial activity onto distributed ledgers. Government figures show that Hong Kong has issued three batches of tokenized green bonds totaling about HK$16.8 billion ($2.1 billion) since 2023, while the HKMA is advancing tokenized deposits and digital-asset settlement through Project Ensemble.

The HKMA white paper warned that distributed ledger applications and payment networks depend on cryptography for core functions and could face severe disruption if those protections were compromised. It cited HSBC's 2024 use of quantum-safe technology to move tokenized gold across distributed ledgers as an example of post-quantum cryptography in action.