Hong Kong banking sector braces for quantum computing risks as digital asset adoption accelerates
By 2030, the HKMA seeks to ensure Hong Kong's financial institutions are completely equipped to handle quantum computing security challenges as tokenized finance grows across the territory.
A new framework to evaluate financial institutions' readiness for threats posed by quantum computing has been rolled out by the Hong Kong Monetary Authority (HKMA), coinciding with the territory's growing adoption of tokenized deposits, blockchain-based settlement systems, and digital assets.
The HKMA unveiled its white paper focused on quantum readiness along with the banking industry's inaugural Quantum Preparedness Index (QPI) on Monday. According to the index, the financial sector received an overall preparedness rating of 2.3 on a scale of 10, and the white paper revealed that approximately 50% of institutions surveyed lacked any formal strategy for post-quantum security. The regulatory authority has set a target of reaching complete sector preparedness, indicated by a QPI score of 10, within the timeframe ending in 2030.
This initiative emerges at a time when Hong Kong is transitioning increasing amounts of conventional financial operations to distributed ledger technology. Data from the government indicates that since 2023, Hong Kong has completed three separate issuances of tokenized green bonds with a combined value of approximately HK$16.8 billion (roughly $2.1 billion), and the HKMA continues to push forward with tokenized deposit systems and digital asset settlement capabilities through its Project Ensemble initiative.
According to the HKMA's white paper, payment infrastructure and distributed ledger applications rely heavily on cryptographic security for essential operations and would be vulnerable to significant disruption should those security measures be breached.
The white paper additionally noted that one financial institution participating in the survey had successfully completed a proof of concept implementing post-quantum cryptographic methods to distributed-ledger connectivity, and referenced HSBC's implementation in 2024 of quantum-resistant technology for transferring tokenized gold across distributed ledger systems.
Hong Kong's tokenization push raises quantum stakes
This quantum security initiative comes on the heels of the HKMA's introduction of its Fintech 2030 strategy in 2025, which designated tokenization as one of four core strategic pillars within a comprehensive plan encompassing more than 40 separate initiatives.
The financial regulator indicated it would fast-track the tokenization of real-world assets (RWA), establish regular issuance schedules for tokenized government bonds, and investigate tokenized Exchange Fund papers, with distributed ledger settlement infrastructure backed by e-HKD, tokenized deposit systems, and regulated stablecoin frameworks.
During a speech delivered on Feb. 11, 2026, Hong Kong's Financial Secretary Paul Chan revealed that financial institutions in Hong Kong held digital assets valued at more than HK$14 billion (approximately $1.785 billion) in custody as of the conclusion of 2025, representing a year-over-year increase of roughly 180%, and that tokenized deposits had climbed to HK$29 billion ($3.7 billion).
The HKMA white paper explains that quantum computing systems with the capability to execute Shor's algorithm at significant scale could ultimately compromise the commonly deployed RSA and elliptic-curve cryptographic protocols. Such breaches could enable malicious actors to decrypt sensitive protected information or create counterfeit digital signatures that serve to authorize financial transactions, confirm identities, and maintain trust throughout financial infrastructure.
Given that the replacement of deeply integrated cryptographic frameworks can require multiple years to complete, the HKMA encouraged financial institutions to initiate comprehensive inventories, conduct thorough risk assessments, and develop detailed migration strategies well in advance of when such quantum computing machines become operationally available.