Quantum technology boosts security of HSBC gold token
Global bank HSBC announced Thursday it had completed trials in the first application of quantum-secure technology for buying and selling tokenized physical gold.
Last year, the bank started offering tokenized physical gold to institutional investors using distributed ledger technology. The addition of quantum-secure technology, through a partnership with Quantinuum, will provide “holistic protection of digital assets such as HSBC gold tokens from a quantum computing attack, and prevent ‘store now, decrypt-later’ cyber incidents,” the press release states.
Quantinuum founder and Chief Product Officer Ilyas Khan said, “As long-time partners in exploring commercial quantum applications, HSBC and Quantinuum are together building the next generation of financial services featuring quantum-hardened defenses harnessing the power of today’s quantum computers to safeguard sensitive data now and into the future.”
What’s tokenized physical gold?
Owning physical gold can be costly due to storage fees, inconvenient due to space restrictions, and, in cases of theft, even risky. In response, banks are beginning to offer tokenized physical gold products, which allow for the transfer of portions of physical gold stored in banks to be passed between investors digitally using blockchain technology.
Exchange-traded funds have often been used to help investors skirt the negatives of physical ownership, however, those assets don’t provide underlying ownership in physical gold and can take several days to settle trades and receive access to funds. Digital gold tokens have neither of those problems.
HSBC’s digital gold token, the HSBC Gold Token, is denominated in .001 troy ounce fractions.
HSBC Global Head of Quantum Technologies Philip Intallura said, “HSBC was the first international bank to offer tokenized physical gold and is now building on that innovation with cutting-edge cybersecurity protection for the future. This pilot successfully demonstrated the viability of deploying these advanced technologies for a real-world business environment.”
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