Quantum Computing and the Financial System: Spooky Action at a Distance?

Author/Editor:

Jose Deodoro ; Michael Gorbanyov ; Majid Malaika ; Tahsin Saadi Sedik

Publication Date:

March 12, 2021

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

The era of quantum computing is about to begin, with profound implications for the global economy and the financial system. Rapid development of quantum computing brings both benefits and risks. Quantum computers can revolutionize industries and fields that require significant computing power, including modeling financial markets, designing new effective medicines and vaccines, and empowering artificial intelligence, as well as creating a new and secure way of communication (quantum Internet). But they would also crack many of the current encryption algorithms and threaten financial stability by compromising the security of mobile banking, e-commerce, fintech, digital currencies, and Internet information exchange. While the work on quantum-safe encryption is still in progress, financial institutions should take steps now to prepare for the cryptographic transition, by assessing future and retroactive risks from quantum computers, taking an inventory of their cryptographic algorithms (especially public keys), and building cryptographic agility to improve the overall cybersecurity resilience.

Series:

Working Paper No. 2021/071

Subject:

Computer science Economic sectors Financial crises Financial sector Migration Population and demographics Technology

Frequency:

regular