The BIS Innovation Hub Eurosystem Centre in partnership with European banks has successfully set up a quantum-safe communication channel that shields financial data
The Bank for International Settlements (BIS) Innovation Hub Eurosystem Centre, along with Banque de France and Deutsche Bundesbank successfully completed Project Leap aiming to test a quantum-safe communication channel that protects financial data with innovative cryptographic algorithms.
The research addresses the threat that future quantum computers represent to the confidentiality of financial data. Despite the numerous benefits of quantum computing technology, quantum computers, once they reach sufficient size and power, may present a significant cybersecurity threat to the financial system, as they will be able to break the existing cryptographic encryption schemes.
Failure of the methods currently used to protect financial transactions and data to withstand quantum computing decryption would potentially expose all transactions and much of all existing stored financial data to attack. That risk has already prompted some financial players to experiment with alternative security means. For instance, Mastercard has recently delivered ‘quantum resistant’ contactless cards.
Meanwhile, EU central banks joined BIS to investigate how to update and replace the cryptographic security algorithms that the traditional financial system is critically reliant on.
“While we do not know exactly when quantum computers will be strong enough to crack today’s encryption, central banks need to prepare themselves. Project Leap is a blueprint for how they can do so,” says Raphael Auer, Head of the BIS Innovation Hub Eurosystem Centre.
Within the framework of the project, participants transmitted test payment messages via the experimental quantum-resistant VPN (Virtual Private Network) tunnel. The test transactions were exchanged between servers located in Paris and Frankfurt, demonstrating how critical financial data can be protected in these jurisdictions.