Swathes of Asia’s financial systems are vulnerable to potential disruption from quantum computing technology, including those hosting secure transactions, industry executives have warned.
Only a handful of major economies in the region, such as China, Japan, South Korea and Singapore, have embarked on strategies to safeguard their systems, but most financial institutions across the region are vulnerable to quantum attacks because they are ill prepared, experts say.
The threat looms even as digital wallets and real-time payment systems are widely being used and deeply integrated into the financial systems. Quantum computing is a new branch of processing which can solve complex problems within minutes or hours that might take a classical computer thousands of years to crack.
While it will allow scientists to test and discover new medicines speedily, build climate modelling systems and accelerate scientific research, the system also has the ability to break public-key cryptography or security systems of digital tokens such as bitcoin.
“Asia’s financial systems face an existential threat from quantum computing’s ability to break widely used public-key cryptographic protocols” which underpin digital signatures and enable secure communications, according to Anndy Lian, a Singapore-based intergovernmental blockchain adviser.
Once sufficiently powerful quantum computers emerge – expected within five to 10 years – they could attack stored financial data, forge digital identities and compromise interbank settlements, experts warn.
Such disruptions “could destabilise trust in digital finance”, Lian said.
“In Asean alone, where digital payment adoption is accelerating, the absence of quantum-safe infrastructure leaves trillions of transactions exposed,” he said. “Moreover, the interconnectedness of Asian financial markets means a breach in one jurisdiction could cascade regionally.”
The Asia-Pacific region is poised to become the fastest-growing market for quantum computing, driven by strong government support, significant investments and rapid digital transformation across key countries such as China, Japan, South Korea and India.
Yet regulatory frameworks lagged behind technological developments, with nations in the region lacking a coordinated strategy, Lian said.
Banks in Asia including HSBC, DBS Bank, OCBC and UOB had launched quantum computing initiatives addressing cybersecurity threats and exploring applications in areas such as trading, risk management and fraud detection, industry executives said.
The use of quantum computing across businesses and other applications is expected to become prevalent from the 2030s, according to Alexandra Beckstein, CEO of QAI Ventures, a global venture capital firm focused on quantum technology, which recently established its presence in Singapore.
Banks in the region were worried because passwords might not be safe any more, she said. “Everyone can enter the system, and this will, of course, tremendously damage the capital markets.”
Beckstein predicted that it would be possible to decrypt all the data currently stored in the early 2030s. “So every data you produce right now is potentially prone to threat, so we are not secure now, just because quantum is not happening yet,” she said.
A lot of the banks were currently implementing classical algorithms that would make it harder for a quantum computer to break encryption, she added.
Uneven safeguards
Other industry executives noted, however, that the implementation of security systems across Asia was uneven.
“Asia has bright spots where supervisors and industry are already experimenting with quantum-safe measures, yet region-wide readiness remains nascent,” said Raj Kapoor, founder and chairman of India Blockchain Alliance, noting that most institutions in Asia were only at the stage of building awareness.
According to Kapoor, Singapore is among the most well-prepared countries for the transition to quantum computing in the Asian region, while mainland China has also made significant progress in developing infrastructure. In India and Hong Kong, the momentum is building, but the preparedness is mixed.
But each major Asian market needed to set a clear timetable for developing a common framework to prevent a messy “big-bang switchover”, Kapoor said.
Experts have repeatedly urged the need for greater coordination of cyber policies in Asia, one of the fastest-growing internet markets which has also emerged as a global hotspot for cybercrime.
“Quantum computing will not immediately equip cybercriminals in Southeast Asia with quantum machines, as those remain years away from practical, widespread use. However, it fundamentally alters the threat landscape,” Lian said.
He warned that large-scale quantum computers would expose “vast troves of currently encrypted data”.
“Cybercriminals operating from the region may not wield quantum computers directly, but they will certainly exploit the fallout” by manipulating data decrypted by others, Lian said.
Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.
Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.
An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.
