Quantum Tokens Delivered Over Fiber Optics in World First

In a significant step toward quantum-enhanced financial transactions, Quantinuum and Mitsui have demonstrated the first successful delivery of quantum tokens across a six-mile fiber-optic network in Japan.

Quantum tokens use quantum physics to provide unforgeable, private and fast settlement for asset trading without the communication overhead required by traditional financial systems.

They are transmitted across the fiber-optic quantum key distribution (QKD) networks that are growing in use globally to securely exchange encryption keys between parties over fiber optic cables.

QKD is more secure than conventional key distribution because it uses the laws of physics to protect data and can detect attempts by third parties to compromise the encryption key.

Quantinuum and Mitsui used commercial QKD hardware provided by NEC to demonstrate fast transaction verification at the point of exchange.

“The original motivation for quantum communications was the exchange of money, as envisaged by Stephen Wiesner,” said Quantinuum founder and chief product officer Ilyas Khan.

“Today, we have demonstrated real-world security enhancements for financial systems using off-the-shelf quantum communications hardware. This opens the door to a new era in quantum-enhanced security with wide applicability, providing commercial organizations with something concrete to utilize."

Related:HSBC Tests Gold Tokens with Post-Quantum Cryptography

Using quantum tokens could prevent forgery and settle transactions practically instantly. Traditional payment systems are slow and risky. They rely on double-entry bookkeeping to prevent double-spending of funds and consult digital systems to confirm funds are available to settle transactions.

"Quantum tokens will increase the security of digital assets while improving transaction performance and maintaining privacy,” said Mistsui quantum innovation department deputy general manager Koji Naniwada.

“These topics are critical for our customers and partners in the financial sector and this demonstration is a valuable outcome of our partnership with Quantinuum."

Quantum tokens ensure only the intended recipient would receive the correct token data, which can be spent at only one location in the future. They make transaction settlements near-instant by removing the need to check multiple systems or wait for network confirmations.

“We are the first to provide a platform for realizing a quantum token system using NEC's QKD devices,” said NEC trading and service solution department director Naoki Ishida.

“Based on the results of this trial between Mitsui and Quantinuum, we will continue to work towards the social implementation of quantum cryptography technology.”

Related:Toshiba Backs Singapore’s Quantum-Safe Goals

This demonstration builds on Quantinuum’s secure financial transaction work with HSBC. The companies recently piloted quantum-secure technologies to protect tokenized gold transactions.