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The quantum challenge: implications and strategies for a secure financial system

Author

Listed:
  • Cristina Andriani

    (Bank of Italy)

  • Lorenzo Bencivelli

    (Bank of Italy)

  • Antonio Castellucci

    (Bank of Italy)

  • Mauro De Santis

    (Bank of Italy)

  • Sabina Marchetti

    (Bank of Italy)

  • Giovanna Piantanida

    (Bank of Italy)

Abstract

Quantum computing (QC) is an emerging technology that can potentially solve long-standing computational problems considered intractable with classical computers, including encryption algorithms that protect communication channels and digital assets. While the financial sector is strategically positioned to leverage the benefits of QC, the diffusion of QC may turn into a vulnerability, as encryption protocols underpin the security of communication channels and the integrity of digital assets, including central bank digital currencies (CBDCs). Where there are numerous technological solutions that are not always interoperable or easy to integrate into the existing IT and network infrastructures, the transition to an ecosystem that is robust against QC attacks requires supranational strategies that support the adoption of mutually compatible standards. This paper provides an overview of QC and the possible implications of its diffusion for the security and resilience of the financial sector. It also identifies the most appropriate international cooperation forums for designing and monitoring the implementation of transition plans for the financial sector.

Suggested Citation

  • Cristina Andriani & Lorenzo Bencivelli & Antonio Castellucci & Mauro De Santis & Sabina Marchetti & Giovanna Piantanida, 2024. "The quantum challenge: implications and strategies for a secure financial system," Questioni di Economia e Finanza (Occasional Papers) 877, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_877_24
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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2024-0877/QEF_877_24.pdf
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    References listed on IDEAS

    as
    1. Lieven M. K. Vandersypen & Matthias Steffen & Gregory Breyta & Costantino S. Yannoni & Mark H. Sherwood & Isaac L. Chuang, 2001. "Experimental realization of Shor's quantum factoring algorithm using nuclear magnetic resonance," Nature, Nature, vol. 414(6866), pages 883-887, December.
    2. Francisco José Herrera Luque & José Munera López & Paul Williams, 2021. "Cyber risk as a threat to financial stability," Revista de Estabilidad Financiera, Banco de España, issue Primavera.
    3. Francisco José Herrera Luque & José Munera López & Paul Williams, 2021. "Cyber risk as a threat to financial stability," Financial Stability Review, Banco de España, issue Spring.
    4. Anand, Kartik & Duley, Chanelle & Gai, Prasanna, 2022. "Cybersecurity and financial stability," Discussion Papers 08/2022, Deutsche Bundesbank.
    5. Francisco José Herrera Luque & José Munera López & Paul Williams, 2021. "Cyber risk as a threat to financial stability," Financial Stability Review, Banco de España, issue Spring.
    6. Mr. Michael Gorbanyov & Majid Malaika & Tahsin Saadi Sedik, 2021. "Quantum Computing and the Financial System: Spooky Action at a Distance?," IMF Working Papers 2021/071, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    quantum computing; quantum agility; cryptography; technical standards;
    All these keywords.

    JEL classification:

    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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