Hong Kong Banks Unprepared for Quantum Threats Amid Tokenization Push

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

The HKMA introduced a white paper on quantum preparedness and the sector's first Quantum Preparedness Index (QPI), which gave the sector an overall readiness score of 2.3 out of 10.

The index showed that around half of surveyed institutions had no formal post-quantum planning in place, highlighting the need for banks to start preparing for potential threats.

The development comes as Hong Kong moves more traditional financial activity onto distributed ledgers. The city has issued three batches of tokenized green bonds totaling about HK$16.8 billion (about $2.1 billion) since 2023.

The HKMA white paper warned that distributed ledger applications and payment networks could face severe disruption if their cryptographic protections are compromised by quantum computers capable of running Shor's algorithm at scale.