## Quantum Computing and the Financial System: Spooky Action at a Distance?

_IMF Working Papers, March 12, 2021_

## Source details

**Canonical URL:** [Quantum Computing and the Financial System: Spooky Action at a Distance?](https://www.imf.org/en/publications/wp/issues/2021/03/12/quantum-computing-and-the-financial-system-spooky-action-at-a-distance-50159)

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## Bibliographic details
- Authors: Michael Gorbanyov, Majid Malaika, Tahsin Saadi Sedik
- Published: March 12, 2021
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513572727.001

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### Executive summary
- The era of quantum computing is about to begin, with profound implications for the global economy and the financial system.
- Rapid development of quantum computing brings both benefits and risks.
- Quantum computers can:
  - revolutionize industries and fields that require significant computing power, including modeling financial markets;
  - enable designing new effective medicines and vaccines;
  - empower artificial intelligence;
  - create a new and secure way of communication (quantum Internet).
- Quantum computers would also crack many of the current encryption algorithms and threaten financial stability by compromising the security of:
  - mobile banking;
  - e-commerce;
  - fintech;
  - digital currencies;
  - Internet information exchange.

### Key findings and risks
- Quantum capability poses both prospective (future) and retroactive risks to data and transactions protected by current cryptography.
- The cryptographic threat is broad, affecting financial-sector services and infrastructure that rely on public-key cryptography.
- Work on quantum-safe encryption is still in progress; therefore preparedness actions are urgent to avoid exposure.

### Policy recommendations and operational steps for financial institutions
- Assess future and retroactive risks from quantum computers.
- Take an inventory of cryptographic algorithms in use, with emphasis on public keys.
- Build cryptographic agility to improve overall cybersecurity resilience (enable transition to quantum-safe algorithms when available).

### Subject areas and keywords (as listed)
- Subject: Computer science, Economic sectors, Financial crises, Financial sector, Migration, Population and demographics, Technology
- Keywords: cloud service, Computer science, computing technology, cybersecurity, encryption standard, Financial sector, fintech, fintech., functioning quantum computer, Global, hardware capability, Migration, quantum computing, quantum machine, quantum-safe encryption

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- **Working Paper**
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_Source: https://www.imf.org/en/publications/wp/issues/2021/03/12/quantum-computing-and-the-financial-system-spooky-action-at-a-distance-50159_