Key Takeaways:
- RFI and Safeheron announced a pilot program on quantum-resistant crypto wallet functionality and transfers.
- Banks will participate in testing ML-DSA-65 and MPC on a NEAR testnet.
- Security, interoperability and governance to be covered by regulators.
The crypto sector is getting ready for what may be coming into battle with one of the threats that can endanger the crypto-currency functions which protect digital assets today. Banks, regulators, and crypto infrastructure companies are coming together in a new controlled cross-border pilot to put new quantum-resistant transaction-technology through its paces.
Banks Test Post-Quantum Crypto Transactions
The Responsible Fintech Institute (RFI) and Safeheron announced the pilot on August 24, focusing on how financial institutions could protect digital asset transactions against future quantum-computing threats.
The project employs a multi-party computation (MPC) protocol that is suitable for supporting the digital signature standard outlined in NIST’s FIPS 204, known as ML-DSA-65. Testing will be conducted on a NEAR testnet that is resistant to quantum computers.
Banks will analyze real-life functions such as wallet creation and sending/receiving of funds onchain. As the setup is supposed to mimic institutional routine rather than just be used as a theoretical experiment.
The pilot also features a suggested MPC model structure of 2 members: non-custodial 2-of-2, a model that offers institutional control of key ownership, without undue complexity at the operational level.
Read More: ZKsync Powers Tokenized Deposits in Major U.S. Bank Network
Regulators Join the Security Testing
The initiative brings together financial institutions and regulatory stakeholders from several jurisdictions.
Current participants comprise Bison, Bank and DK, and regulatory participants are Gelephu Financial Services Office and the Malta Financial Services Authority.
The initial engagement is as observers, followed by involvement in a governance-oriented workstream. This allows supervisors to reflect on potential operational ramifications for post-quantum infrastructure in terms of operational resilience, compliance and cross-border interoperability.
The project aims to foster interactions among institutions instead of leaving it up to one bank, vendor, or regulator to come up with the solution, said RFI Chair Chia Hock Lai.
Crypto Industry Moves Toward Quantum Readiness
Public-key cryptography is foundational in many systems, such as financial systems, and it is being challenged by the possibility of quantum computers. The quantum computer, if as powerful as proposed, would be capable of compromising secure cryptographic systems.
This doesn’t mean legacy cryptocurrencies are ready to sink, however. The problem is readying infrastructure in advance to facilitate orderly migration in the event that the stronger quantum capabilities foreseeable turns to reality.
The Bank for International Settlements (BIS) has also mentioned the necessity of a coordinated plan, cryptographic agility, and gradually entering the transition of the financial field.
RFI and Safeheron will be releasing a white paper on the research, protocol design and testing outcomes of the pilot. Safeheron also plans to eventually release the underlying post-quantum code open-source to enable independent researchers and security experts to investigate how it works.
It is no longer the question of ‘can blockchains withstand future quantum attacks’ for cryptos; it is now ‘how’. The pilot is designed to determine whether banks, regulators and banks infrastructure providers can implement a quantum resistant wallet and quantum transaction in the real financial environment.
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