European Union warns: Judgment day may come before quantum computers have commercial utility

What's going on?

Three European Union monetary supervisory authorities , namely the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA) and the European Securities and Markets Authority (ESMA), issued their Autumn Risk Assessment of the EU's Monetary System report in which they noted that high-level quantum computing could break encryption systems used to protect financial transactions .

The most worrying point is that the Joint Committee of three agencies noted that this threat could arrive "faster than any other commercially feasible application" meaning a machine capable of decoding might happen before quantum computers are useful for another task.

"Harvest now, decrypt later" What is that?

This is a strategy that has alarmed many: encrypted data doesn't have to be read when it gets stolen, the unsuspecting person can collect pre-encoded information and then wait for the day when quantum computers evolve to the point where they can decode it later.

The report states that the data captured today, if still valuable in another 10 years, is considered to be at risk as of now.

What more should a crypto player know?

For blockchains, this risk has been measured realistically. Blockchain data analytics company Glassnode released an analysis in May that found Bitcoin to be worth $6.04 billion or 30.2% of the total amount mined, valued at more than US$469,000 million. At present there are public key visible on a blockchain so it can be targeted without any transaction occurring.

The community calls the point in time at which quantum machines can break encryption of Bitcoin and Ethereum "Q-Day", with estimates ranging from 2030 to 2032 or later.

What is the European Union doing?

There are two laws and measures: the first is that you have to be careful about what you eat.

• This appropriation is intended to cover commitments remaining to be settled from previous years. It requires that financial institutions use the most advanced encryption to deal with emerging threats.
• NIS cooperation group The European Union's separate recommendation is for member states to prepare a strategy to move towards the use of quantum back coding (post-quantum cryptography ) by the end of 2026, which leaves just three months from this announcement.

Does it have a plus side?

There, regulators aren't looking away altogether. The report notes that quantum computers could "transform the financial sector" in the medium term by improving efficiency of monetary processes, fraud detection and supervisory work, pricing and situation modeling

The three agencies reiterated that the overall financial system remains stable, but enables authorities and financial institutions to plan for addressing risks from the rapid development of AI and quantum computing along with maintaining operational continuity and strengthening cybersecurity capabilities.

How does this news relate to Thai investors?

Although this is an EU-level measure, the quantum back coding trend is becoming a global standard that regulatory agencies around the world including the SEC (Thailand) Thailand are following as cybersecurity issues of digital currency systems require blockchain infrastructure to be upgraded.