{ "title": "QUANTUM COMPUTING'S POSSIBILITIES AND PERILS", "sourceUrl": "https://www.imf.org/en/publications/fandd/issues/2021/09/quantum-computings-possibilitiesand-perils-deodoro", "canonical": "https://www.imf.org/en/publications/fandd/issues/2021/09/quantum-computings-possibilitiesand-perils-deodoro", "overlayPath": "/en/publications/fandd/issues/2021/09/quantum-computings-possibilitiesand-perils-deodoro/index.md", "summary": "José Deodoro, Michael Gorbanyov, Majid Malaika, and Tahsin Saadi Sedik write that Quantum computers could crack the cryptography that underpins financial stability.", "sections": [ { "heading": "Quantum fundamentals and potential", "content": "- Quantum computing uses quantum phenomena such as superposition and entanglement to perform computations.\n- The basic unit is the quantum bit (qubit); qubits represent both zero and one simultaneously (superposition).\n- Entanglement: changing the state of one entangled element affects others instantly regardless of distance.\n- Increasing qubit count delivers exponential rises in processing power:\n - It would take about 18 quadrillion bits of traditional memory to model a quantum computer with just 54 qubits.\n - A 100 qubit quantum computer would require more bits than there are atoms on our planet.\n - A 280 qubit computer would require more bits than there are atoms in the known universe.\n- Quantum advantage evidence:\n - In 2019, Google used a quantum computer to perform a specific computation task in just 200 seconds; the company said the same task would have taken the most powerful digital supercomputer at that time 10,000 years." }, { "heading": "Possibilities for science, industry, and finance", "content": "- Quantum computers can explore many solution paths simultaneously, drastically reducing time to solutions for complex tasks.\n- Potential applications:\n - Accelerate scientific discovery and innovation across subatomic particle modeling, molecular interactions, and chemical reactions.\n - Revolutionize chemical engineering and material science (for example, design of new materials such as solid-state batteries).\n - Improve understanding of climate change through advanced modeling.\n - Transform financial market modeling and simulations by enabling more accurate Monte Carlo simulations almost in real time without unrealistic simplifications.\n - Solve optimization tasks—allocating capital, portfolio optimization, ATM cash management—in a fraction of current computation time.\n - Speed training of machine learning algorithms without the exponential time penalty seen with added dimensions in digital computers." }, { "heading": "Cryptographic risks and implications for financial stability", "content": "- Quantum computing threatens modern cryptography—symmetric keys, asymmetric keys (public keys), and hash functions—used widely for digital authentication, digital signatures, and data security.\n- Asymmetric keys are especially vulnerable because most are based on the factorization problem; quantum computers can factor effortlessly.\n- A fully functioning quantum computer could, in theory, break an asymmetric key in a matter of minutes.\n- Practical implications of successful attacks:\n - Compromise of internet communications and systems used by the financial system, including mobile banking, e-commerce, payment transactions, ATM cash withdrawals, and VPN communications.\n - Vulnerability of digital assets such as Bitcoin and Ethereum and password-protected web applications.\n - The HTTPS protocol is noted to be used by 97 of the world's top 100 websites.\n- Retroactive risk:\n - Information captured and stored today could be deciphered later once sufficiently powerful quantum computers exist; almost any encrypted personal or financial message sent and stored today could be deciphered retroactively.\n - Many financial institutions and regulators are not yet alert to these novel risks." }, { "heading": "Transition efforts and timeline", "content": "- Standards development:\n - The National Institute of Standards and Technology (United States) is running a competition to develop quantum-safe encryption algorithms and hopes to announce a winner by 2024.\n - The European Telecommunications Standards Institute is also taking a lead; these efforts feed into other standard-setting bodies.\n- Narrow window for migration due to retroactive risks.\n- Practical challenges:\n - Financial institutions must inventory public-key cryptography they use and that used by third-party suppliers.\n - Transitioning vulnerable algorithms to post-quantum cryptography and building cryptographic agility is required.\n - Historical experience shows algorithm replacements can be extremely disruptive and often take years or decades." }, { "heading": "Recommendations and policy actions", "content": "- Immediate steps for financial institutions:\n - Assess retroactive and future risks from quantum computers, including from information that may already have been captured.\n - Develop plans to migrate current cryptography to quantum-resistant algorithms.\n - Build cryptographic agility so algorithms can be upgraded smoothly.\n- Role of the IMF:\n - Raise awareness among member countries about risks to financial stability from quantum computers.\n - Promote quantum-safe standards and practices.\n - Encourage member countries to collaborate closely in developing quantum-safe encryption standards to ensure interoperability and adopt encryption migration plans for their financial sectors.\n- Operational caution:\n - Recognize that today's quantum computers are very sensitive to environmental disturbances (heat, light, vibration), which produce computation errors by pulling qubits out of their quantum state; however, machines capable of cracking codes with fewer errors are not far off.\n\nBased on the article “Quantum Computing's Possibilities and Perils” (F&D Magazine, September 2021) by Tahsin Saadi Sedik, Majid Malaika, Michael Gorbanyov, and José Deodoro; article is based on IMF Working Paper 21/71, “Quantum Computing and the Financial System: Spooky Action at a Distance?”\n\n---\n\n Content in this bundle\n\n- الحوسبة الكمية: الفرص والمخاطر\n - الحوسبة الكمية: الفرص والمخاطر (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - الحوسبة الكمية: الفرص والمخاطر (PDF){rel=\"external\" type=\"application/pdf\"}\n- LAS POSIBILIDADES Y LOS RIESGOS de la informática cuántica\n - LAS POSIBILIDADES Y LOS RIESGOS de la informática cuántica (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - LAS POSIBILIDADES Y LOS RIESGOS de la informática cuántica (PDF){rel=\"external\" type=\"application/pdf\"}\n- Perspectives et risques de l’informatique quantique\n - Perspectives et risques de l’informatique quantique (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Perspectives et risques de l’informatique quantique (PDF){rel=\"external\" type=\"application/pdf\"}\n- Квантовые вычислительные техника: возможности и опасности\n - Квантовые вычислительные техника: возможности и опасности (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Квантовые вычислительные техника: возможности и опасности (PDF){rel=\"external\" type=\"application/pdf\"}\n- 量子计算面临的机遇和风险 ● 《金融与发展》● 2021年12月号\n - 量子计算面临的机遇和风险 ● 《金融与发展》● 2021年12月号 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - 量子计算面临的机遇和风险 ● 《金融与发展》● 2021年12月号 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/fandd/issues/2021/09/quantum-computings-possibilitiesand-perils-deodoro" } ], "bullets": [ "[Markdown version](/en/publications/fandd/issues/2021/09/quantum-computings-possibilitiesand-perils-deodoro/index.md)", "[Structured JSON version](/en/publications/fandd/issues/2021/09/quantum-computings-possibilitiesand-perils-deodoro/index.json)", "[Bundle manifest](/en/publications/fandd/issues/2021/09/quantum-computings-possibilitiesand-perils-deodoro/bundle-manifest.json)", "Authors: TAHSIN SAADI SEDIK, MAJID MALAIKA, MICHAEL GORBANYOV, JOSE DEODORO", "Published: November 25, 2021", "Quantum computing uses quantum phenomena such as superposition and entanglement to perform computations.", "The basic unit is the quantum bit (qubit); qubits represent both zero and one simultaneously (superposition).", "Entanglement: changing the state of one entangled element affects others instantly regardless of distance.", "Increasing qubit count delivers exponential rises in processing power:", "Quantum advantage evidence:", "Quantum computers can explore many solution paths simultaneously, drastically reducing time to solutions for complex tasks.", "Potential applications:", "Quantum computing threatens modern cryptography—symmetric keys, asymmetric keys (public keys), and hash functions—used widely for digital authentication, digital signatures, and data security.", "Asymmetric keys are especially vulnerable because most are based on the factorization problem; quantum computers can factor effortlessly.", "A fully functioning quantum computer could, in theory, break an asymmetric key in a matter of minutes.", "Practical implications of successful attacks:", "Retroactive risk:", "Standards development:", "Narrow window for migration due to retroactive risks.", "Practical challenges:", "Immediate steps for financial institutions:", "Role of the IMF:", "Operational caution:", "**الحوسبة الكمية: الفرص والمخاطر**", "**LAS POSIBILIDADES Y LOS RIESGOS de la informática cuántica**", "**Perspectives et risques de l’informatique quantique**", "**Квантовые вычислительные техника: возможности и опасности**", "**量子计算面临的机遇和风险 ● 《金融与发展》● 2021年12月号**" ], "related": [ { "title": "الحوسبة الكمية: الفرص والمخاطر", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/fandd/article/2021/december/ar/deodoro.pdf", "summary": { "path": "/-/media/files/publications/fandd/article/2021/december/ar/deodoro.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/fandd/article/2021/december/ar/deodoro.pdf", "mime": "application/pdf" } }, { "title": "LAS POSIBILIDADES Y LOS RIESGOS de la informática cuántica", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/fandd/article/2021/december/es/deodoro.pdf", "summary": { "path": "/-/media/files/publications/fandd/article/2021/december/es/deodoro.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/fandd/article/2021/december/es/deodoro.pdf", "mime": "application/pdf" } }, { "title": "Perspectives et risques de l’informatique quantique", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/fandd/article/2021/december/fr/deodoro.pdf", "summary": { "path": "/-/media/files/publications/fandd/article/2021/december/fr/deodoro.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/fandd/article/2021/december/fr/deodoro.pdf", "mime": "application/pdf" } }, { "title": "Квантовые вычислительные техника: возможности и опасности", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/fandd/article/2021/december/ru/deodoro.pdf", "summary": { "path": "/-/media/files/publications/fandd/article/2021/december/ru/deodoro.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/fandd/article/2021/december/ru/deodoro.pdf", "mime": "application/pdf" } }, { "title": "量子计算面临的机遇和风险 ● 《金融与发展》● 2021年12月号", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/fandd/article/2021/december/zh/deodoro.pdf", "summary": { "path": "/-/media/files/publications/fandd/article/2021/december/zh/deodoro.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/fandd/article/2021/december/zh/deodoro.pdf", "mime": "application/pdf" } } ], "alternates": { "markdown": "/en/publications/fandd/issues/2021/09/quantum-computings-possibilitiesand-perils-deodoro/index.md", "json": "/en/publications/fandd/issues/2021/09/quantum-computings-possibilitiesand-perils-deodoro/index.json", "bundleManifest": "/en/publications/fandd/issues/2021/09/quantum-computings-possibilitiesand-perils-deodoro/bundle-manifest.json" }, "generatedAtUtc": "2026-09-15T17:03:27.867Z" }