Hong Kong-Shanghai Banking Corporation (HSBC), an international banking giant, announced the first successful test of quantum computing in a trading application on Thursday.
Researchers at HSBC used a quantum computer processor as part of their algorithmic trading process, a method of trading that uses pre-defined rules to execute transactions, to find the likelihood of filling over-the-counter (OTC) bond orders at the desired price.
HSBC announced that the quantum processing created a 34% improvement in predicting bond prices and the likelihood of filling orders without slippage. Philip Intallura, HSBC’s group head of quantum technologies, said:
“Given the trial delivered positive results on current quantum computing hardware, we have great confidence we are on the cusp of a new frontier of computing in financial services, rather than something that is far away in the future.”
Cryptocurrencies depend on encryption standards that could be cracked by a sufficiently powerful quantum computer, causing debate among blockchain developers about the timeline of the threat and when migration to quantum-resistant cryptography must occur.
The share of the Bitcoin supply vulnerable to quantum attacks. Source: Cointelegraph
Developers remain divided on the quantum threat
Blockchain developers remain divided on when quantum computers will crack the modern encryption methods that underpin cryptocurrencies and are also used across banking, military and consumer financial applications.
The lower end of the range forecasts “Q-Day,” or the moment at which a sufficiently powerful quantum computer could crack modern encryption algorithms, in five years, sometime around 2030, with many developers fearing that quantum supremacy will occur in 2035.
However, others like Bitcoin (BTC) developer Adam Back say that quantum supremacy is decades away from happening, if it will happen at all.
In November 2024, researchers at Shanghai University rekindled fears among the crypto community that quantum computers had cracked modern encryption algorithms in a series of tests.
However, a closer look at the experiment found that the quantum computer was only able to break a 22-bit key, which is an order of magnitude below the 892-bit record set by a classical computer.
For context, modern encryption keys used in RSA encryption range from 2,048 bits to 4,096 bits and can be periodically doubled to stay ahead of quantum processing power.
