HSBC Tests Gold Tokens with Post-Quantum Cryptography

International bank HSBC and quantum computing company Quantinuum have successfully piloted quantum-secure technologies to protect tokenized gold transactions.

Tokenized physical gold refers to a process where physical gold is represented digitally as a token on a blockchain or distributed ledger. Each token represents ownership of a specific amount of real, physical gold, which is typically stored in a secure vault.

HSBC began offering tokenized physical gold to institutional investors using distributed ledger technology last year and this year it launched HSBC Gold Token for retail investors in Hong Kong. The bank used its HSBC Orion platform, which hosts a variety of digital assets solutions including those creating, settling and recording digital bonds, for both.

HSBC also tested that its gold tokens work alongside post-quantum cryptography (PQC) to move digital assets safely across distributed ledgers via secure networks.

“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,” said HSBC global head of quantum technologies Philip Intallura.

“This pilot successfully demonstrated the viability of deploying these advanced technologies for a real-world business environment.”

Related:HSBC, PayPal Join Quantum-Safe Cryptography for Payments Group

Quantinuum used NIST-compliant PQC algorithms and its Quantum Origin quantum randomness technology for the trial to protect digital assets like HSBC gold tokens from decryption by a quantum computer, including harvest now, decrypt later attacks. This describes stealing and storing encrypted data until a sufficiently powerful future quantum computer can decrypt them.

“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,” said Quantinuum founder and chief product officer Ilyas Khan.