The quantum crypto migration risk facing the digital asset industry now extends to more than $2 trillion in cryptocurrency, as researchers edge closer to computers powerful enough to break the cryptography that secures blockchain wallets.
Christopher Smith, co-founder and chief executive of quantum-secure blockchain network Quantus, said the threat is systemic. ‘The great quantum migration is going to require the entire digital asset industry to participate,’ he said.
The figure covers assets secured by elliptic curve cryptography, which Smith said ‘has been known to be quantum-vulnerable for over 30 years’. That sum represents nearly the entire crypto market, valued at $2.16 trillion.
Why quantum crypto migration risk is growing now
Quantum computers process information using qubits derived from subatomic particles and trapped ions, rather than the binary bits used by classical machines. The technology can, in theory, perform in seconds calculations that would take a standard supercomputer hundreds of millions of years, according to existing research.
Smith said artificial intelligence is being used to accelerate quantum research, narrowing the timeline. Google researchers have estimated that the computational resources needed to attack the elliptic-curve cryptography used by cryptocurrencies may be lower than previously thought.
Not every part of the ecosystem faces equal exposure. Coinbase told Fortune that Bitcoin’s core infrastructure is largely safe, and that the real vulnerability lies at the wallet level.
Smith pointed to Binance’s Bitcoin cold wallet as a likely early target, saying it holds more than $10 billion. He also flagged the administrative key controlling USDT, the stablecoin, as potentially more dangerous still. ‘This could be used to instantly wreck everything in DeFi,’ he said.
Standards and deadlines: what the industry must do
Regulators are already setting firm deadlines. Silence Laboratories reports that the National Institute of Standards and Technology (NIST) finalised three post-quantum cryptographic standards in 2024: ML-KEM (FIPS 203), ML-DSA (FIPS 204), and SLH-DSA (FIPS 205). NIST has also set a deadline to deprecate classical algorithms by 2030 and prohibit them entirely by 2035.
Google proposed a 2029 target for cryptocurrency systems to migrate away from vulnerable cryptography. NIST has likewise been pushing organisations toward post-quantum alternatives, having standardised replacement algorithms designed to withstand attacks from sufficiently powerful quantum computers.
The technical problem, Coinbase said, is solvable: adding quantum-safe signatures to a blockchain is a standard engineering task. The harder question is what happens to coins whose owners fail to migrate in time.
Coinbase’s independent Quantum Advisory Council has published a report examining ‘abandoned coins’ and the governance questions surrounding assets left in vulnerable addresses. A blockchain developer can build a quantum-resistant system, but if exchanges, wallets and users do not follow, exposure remains.
‘Custodians, exchanges, mobile and hardware wallet providers, blockchain developers and users will all need to take action to protect digital assets,’ Smith said.
Coinbase said it agrees the problem requires industry-wide coordination. The exchange is a founding member of the Bitcoin Security Consortium, which includes BlackRock, Fidelity Digital Assets, Block, Blockstream and Strategy. It said it is contributing to a fund supporting Bitcoin developers working on quantum security and is dedicating engineering resources to open-source proposals including BIP-360.
Building a machine capable of executing a quantum attack remains beyond current capabilities. Smith’s position is that the industry cannot afford to wait for that to change: ‘Being a year too early is much better than being a day too late.’
