HKMA quantum index shows Hong Kong banks score 2.3 out of 10

Hong Kong's banking sector is barely a quarter of the way toward quantum readiness, even as the city pushes deeper into tokenized finance.

The Hong Kong Monetary Authority on Monday gave the city's banking sector a quantum preparedness score of 2.3 out of 10, warning that half of surveyed institutions lack formal plans to guard against quantum-computing threats to encryption.

"The sector is at an early stage of preparedness and currently focused on laying the foundation for the quantum era," the HKMA said in a whitepaper released at the eighth edition of its FiNETech series.

The Quantum Preparedness Index, assessed across awareness, planning, pilots and practical preparedness, found that 68% of banks have begun preparations while 32% have taken no steps. About half of respondents said quantum computing had been discussed at board level, and roughly one-third have started exploring or piloting quantum-related initiatives. The HKMA targets full sector readiness, or a QPI score of 10, by 2030.

The stakes are rising as Hong Kong moves traditional financial activity onto distributed ledgers. The city has issued HK$16.8 billion ($2.1 billion) in tokenized green bonds since 2023, tokenized deposits reached HK$29 billion ($3.7 billion) by end-2025, and banks held HK$14 billion ($1.785 billion) in digital assets under custody — up 180% year over year. Quantum computers running Shor's algorithm at scale could eventually break RSA and elliptic-curve cryptography, the foundation of digital signatures and transaction authorization.

Tokenization Push Raises the Quantum Stakes

The HKMA's quantum initiative follows its Fintech 2030 strategy launched in 2025, which made tokenization one of four strategic pillars across more than 40 initiatives. The regulator said it would accelerate real-world asset tokenization, regularize tokenized government bond issuance and explore tokenized Exchange Fund papers, with blockchain settlement supported by e-HKD, tokenized deposits and regulated stablecoins.

Distributed ledger applications and payment networks depend on cryptography for core functions and could face severe disruption if those protections were compromised, the HKMA whitepaper said. One surveyed institution completed a proof of concept applying post-quantum cryptography to distributed-ledger connectivity, and HSBC in 2024 used quantum-safe technology to move tokenized gold across distributed ledgers.

Global Regulators Turn Attention to Quantum Risks

The HKMA's push aligns with a broader regulatory shift. In May 2026, G7 central banks issued a report warning that quantum computing advances could undermine existing financial infrastructure. Industry estimates suggest quantum computing could generate $400 billion to $600 billion in economic value for financial services by 2035, primarily through portfolio optimization, risk modeling and fraud detection.

To support the transition, the HKMA plans to co-develop a post-quantum cryptography toolkit with the Hong Kong University of Science and Technology, designed to help banks identify priorities for transition planning and enhance cryptographic agility. A series of workshops will follow to build capability and explore responsible use of quantum technologies.

Because replacing embedded cryptographic systems can take years, the HKMA urged banks to begin inventories, risk assessments and migration planning before fault-tolerant quantum machines become available.

This article is for informational purposes only and does not constitute investment advice.