The Hong Kong Monetary Authority (HKMA) has established a new framework to gauge the preparedness of banks for threats from quantum computing, a development that coincides with the city’s increased adoption of tokenized deposits, digital assets, and blockchain settlement.

On Monday, the HKMA introduced a white paper focused on quantum preparedness and launched the sector's first Quantum Preparedness Index (QPI). The index revealed a low overall readiness score of just 2.3 out of 10. The white paper further found that about half of the institutions surveyed had no formal post-quantum planning underway. In response, the HKMA announced its goal to attain full sector readiness, defined by a QPI score of 10, by 2030.

The Push Towards Tokenization

This quantum security initiative arrives as Hong Kong shifts more traditional financial activities onto distributed ledgers. According to government figures, Hong Kong has issued three separate batches of tokenized green bonds since 2023, totaling approximately HK$16.8 billion (about $2.1 billion). The HKMA is also actively promoting tokenized deposits and the settlement of digital assets through its initiative known as Project Ensemble.

The growth in this area was highlighted in a Feb. 11, 2026, speech by Hong Kong Financial Secretary Paul Chan. He stated that at the end of 2025, banks in Hong Kong held over HK$14 billion in digital assets under custody, reflecting a year-over-year increase of about 180%. Chan also noted that tokenized deposits had swelled to HK$29 billion.

This focus on tokenization is a central component of the HKMA’s Fintech 2030 strategy, which was launched in 2025. The strategy identifies tokenization as one of its four strategic pillars and includes more than 40 distinct initiatives. The regulator plans to accelerate the tokenization of real-world assets (RWA), establish regular issuance of tokenized government bonds, and investigate tokenized Exchange Fund papers. These efforts will be underpinned by blockchain settlement utilizing the e-HKD, tokenized deposits, and regulated stablecoins.

Understanding the Quantum Threat

The HKMA's white paper explained that core functions of distributed ledger applications and payment networks rely heavily on cryptography. A successful compromise of these cryptographic protections could lead to severe disruptions.

The document warns that future quantum computers powerful enough to run Shor’s algorithm could break the widely used RSA and elliptic-curve cryptography standards. Such a breakthrough would enable attackers to decrypt protected data or forge the digital signatures that authorize transactions, confirm identities, and build trust within financial networks.

Given that replacing deeply embedded cryptographic systems can be a multi-year process, the HKMA is urging banks to begin their migration planning immediately. The authority recommends that institutions start by creating inventories of their cryptographic systems, conducting comprehensive risk assessments, and developing transition strategies well before cryptographically relevant quantum computers become a reality.

The white paper also noted some early progress, mentioning that one surveyed institution had already finished a proof of concept that applied post-quantum cryptography to its distributed-ledger connectivity. It also highlighted HSBC's 2024 implementation of quantum-safe technology for transactions involving tokenized gold across distributed ledgers.