In a groundbreaking move that signals the future of digital asset security, HSBC has successfully trialled quantum-safe technology for the trading of tokenised physical gold. This initiative reinforces the bank’s leadership in digital innovation and sets a new benchmark for safeguarding financial assets in the emerging era of quantum computing.
As quantum computers advance, they pose a growing threat to conventional encryption methods used across financial systems. To stay ahead of this risk, HSBC has partnered with Quantinuum — the world’s largest integrated quantum computing company — to test post-quantum cryptography (PQC) and quantum-derived randomness in real-world financial applications.
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Advancing Digital Gold with Quantum-Resistant Security
HSBC made history last year as the first global bank to offer tokenised physical gold to institutional investors using distributed ledger technology (DLT). Building on that milestone, the bank launched the HSBC Gold Token for retail investors in Hong Kong, enabling fractional ownership of physical gold stored in secure vaults.
These digital tokens operate on the HSBC Orion digital assets platform, a secure infrastructure designed for issuing, managing, and transferring tokenised assets. Now, with the integration of quantum-safe protections, HSBC is ensuring that these innovations remain resilient against future cyber threats.
The pilot project focused on securing transactions involving gold tokens by implementing PQC algorithms — cryptographic standards currently being evaluated and standardised by the National Institute of Standards and Technology (NIST). These algorithms are specifically engineered to resist attacks from both classical and quantum computers.
Additionally, Quantinuum’s Quantum Origin technology was deployed to generate truly random cryptographic keys using quantum entropy. Unlike traditional pseudo-random number generators, quantum randomness is inherently unpredictable, making it far more resistant to exploitation.
Protecting Against "Store Now, Decrypt Later" Threats
One of the most pressing cybersecurity concerns in the quantum age is the “store now, decrypt later” (SNDL) attack vector. In such scenarios, malicious actors intercept and store encrypted data today, anticipating that future quantum computers will be powerful enough to break current encryption and expose sensitive information.
This threat is particularly relevant for long-lived financial instruments and digital assets like tokenised gold, which may retain value and relevance for decades. By applying quantum-safe encryption today, HSBC is proactively neutralising this risk.
Philip Intallura, Global Head of Quantum Technologies at HSBC, emphasized the strategic importance of this pilot:
“HSBC was the first international bank to offer tokenised physical gold and is now building on that innovation with cutting-edge cybersecurity protection for the future. This pilot successfully demonstrated the viability of deploying these advanced technologies for a real-world business environment.”
The trial also tested cross-chain interoperability, allowing HSBC’s proprietary gold tokens to be converted into ERC-20 fungible tokens. This capability enhances liquidity and accessibility by enabling integration with other DLT platforms and digital wallets — all while maintaining quantum-level security throughout the transfer process.
Core Keywords Driving the Future of Finance
This initiative sits at the intersection of several transformative trends in finance and technology. The core keywords that define this evolution include:
- Quantum-safe technology
- Tokenised gold
- Post-quantum cryptography (PQC)
- Digital assets
- Distributed ledger technology (DLT)
- Quantum computing security
- Fractional ownership
- Cryptographic resilience
These terms not only reflect HSBC’s technological advancements but also align with growing investor interest in secure, accessible, and future-proof financial products.
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Ensuring Interoperability Without Compromising Security
A key challenge in digital asset ecosystems is ensuring seamless interaction across different blockchain networks without exposing data to vulnerabilities. The HSBC pilot addressed this by demonstrating secure asset transfers between isolated ledgers using PQC-protected communication channels.
By converting its gold tokens into ERC-20 standard format, HSBC enables broader market participation. Investors can now manage their holdings through widely used crypto wallets and decentralised finance (DeFi) platforms — an important step toward mainstream adoption.
Yet, unlike many DeFi applications that prioritise openness over security, HSBC’s approach embeds enterprise-grade protection at every layer. The use of NIST-evaluated PQC algorithms ensures compliance readiness, while Quantum Origin strengthens key generation — a critical weak point in many existing systems.
Industry Implications and Broader Applications
While this pilot focused on tokenised gold, the implications extend far beyond precious metals. The same quantum-safe framework could be applied to other tokenised assets such as bonds, equities, real estate, and central bank digital currencies (CBDCs).
As financial institutions increasingly adopt DLT for settlement, clearing, and asset management, securing these systems against future threats becomes imperative. HSBC’s collaboration with Quantinuum offers a scalable blueprint for integrating quantum resilience into core banking infrastructure.
Ilyas Khan, Founder and Chief Product Officer at Quantinuum, highlighted the significance of the partnership:
“As long-time partners in exploring commercial quantum applications, HSBC and Quantinuum are together building the next generation of financial services featuring quantum-hardened defences harnessing the power of today’s quantum computers to safeguard sensitive data now and into the future.”
Frequently Asked Questions (FAQ)
Q: What is tokenised gold?
A: Tokenised gold represents physical gold stored in secure vaults, with ownership recorded as digital tokens on a blockchain or distributed ledger. Each token is backed by real gold, enabling transparent, divisible, and easily transferable ownership.
Q: Why is quantum-safe technology important for digital assets?
A: Quantum computers could eventually break traditional encryption methods. Quantum-safe cryptography uses algorithms resistant to such attacks, ensuring long-term protection of sensitive financial data and digital assets.
Q: Can retail investors buy HSBC’s gold tokens?
A: Yes. HSBC launched the HSBC Gold Token for retail investors in Hong Kong, allowing individuals to purchase fractional shares of physical gold through a regulated platform.
Q: What is post-quantum cryptography (PQC)?
A: PQC refers to cryptographic algorithms designed to be secure against attacks from both classical and future quantum computers. Many are under evaluation by NIST for global standardisation.
Q: How does Quantum Origin enhance security?
A: Quantum Origin uses quantum mechanics to generate truly random cryptographic keys. This eliminates predictability risks associated with software-based random number generators.
Q: Is this technology ready for widespread use?
A: While still in pilot phase, the successful trial demonstrates technical feasibility and business readiness. Broader deployment will depend on regulatory alignment and industry adoption timelines.
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