EU Regulators Warn Quantum Computers Could Compromise Blockchain Cryptography
European financial supervisors jointly warned that advances in quantum computing could threaten the cryptography securing blockchains, which is crucial for the security of transactions and data. The joint risk update from the European Banking Authority, European Insurance and Occupational Pensions Authority, and European Securities and Markets Authority noted that quantum computers could undermine existing security systems. This warning follows recent assessments by Google Quantum AI researchers, who estimated substantially fewer qubits are needed to break the cryptography used by many cryptocurrencies than previously thought.
Concerns Over Quantum Computing and Cryptography
The three main European Union financial regulators—the European Banking Authority (EBA), European Insurance and Occupational Pensions Authority (EIOPA), and European Securities and Markets Authority (ESMA)—issued a joint risk assessment highlighting the threat quantum computing poses to cryptographic systems. The core concern is that quantum computers could break encryption currently securing transactions, communications, and databases on blockchain networks, potentially allowing attackers to derive private keys and access funds.
In March 2024, researchers from Google Quantum AI provided a refined estimate showing that breaking the cryptography securing many cryptocurrencies might require around 20 times fewer physical qubits than prior projections suggested. Given that a qubit is the fundamental unit of quantum computation, this represents a major reduction in the practical threshold for such attacks.
Cryptocurrency Community Response and Defense Plans
No quantum computer capable of executing these attacks exists today, but the prospect highlights the need for proactive measures. In February 2024, Bitcoin developer Jameson Lopp and five co-authors proposed gradually phasing out the network’s existing signature schemes, and restricting the use of funds that have not migrated, five years after activating the proposal. This initiative has not yet been adopted by the wider community.
Meanwhile, the Ethereum Foundation is working to make Ethereum resistant to quantum attacks across its execution, consensus, and data layers. Their goal is to complete these defenses by December 2029. This strategy reflects a recognition of the quantum threat and proactive preparation among leading blockchain projects.
Why it matters
This news is significant because quantum computers have the potential to fundamentally disrupt the cryptography securing cryptocurrencies and blockchains. The official acknowledgment of this risk by European regulators underscores the growing seriousness of the threat and the need for the industry to prepare well before practical quantum attacks emerge. Proposed Bitcoin upgrades and Ethereum’s timelines illustrate that developers are actively formulating adaptation strategies. This serves as a signal to investors and users that cryptocurrency security must evolve over time in response to new technological challenges.
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