Hong Kong’s banking industry received a Quantum Preparedness Index score of 2.3 out of 10, according to a white paper published by the Hong Kong Monetary Authority on July 27, 2026. The index, unveiled at the eighth FiNETech conference, measures readiness across four categories: awareness, planning, pilot programmes and practical preparedness. The regulator aims for the sector to reach a score of 10 by 2030.

The assessment, based on a survey conducted earlier in 2026, found that 68 percent of responding banks had developed some awareness or advanced into planning or pilot stages. The remaining 32 percent had not begun any transition efforts. Approximately half of the institutions lacked a formal plan for adopting post-quantum cryptography. Board-level discussions on quantum computing had taken place at about half of the banks surveyed, while roughly one-third had started exploring or testing related initiatives.

Sector Still Focused on Basic Awareness and Governance

The low overall score indicates that banks are primarily building foundational knowledge and governance structures rather than deploying quantum-resistant systems. The index does not imply that current encryption has failed or that quantum attacks have occurred. It evaluates progress in identifying vulnerable systems, developing transition plans, testing replacements and moving them into operational use.

One surveyed institution completed a proof of concept applying post-quantum cryptography to distributed-ledger connectivity. The white paper also referenced HSBC’s 2024 use of quantum-safe technology to transfer tokenized gold across blockchain platforms as an existing industry example of practical application.

Quantum Risks and the Need for Early Migration

A sufficiently powerful quantum computer could break widely used public-key encryption systems such as RSA and elliptic-curve cryptography by running Shor’s algorithm at scale. This capability could allow attackers to decrypt protected data or forge digital signatures that authorize transactions, verify identities and maintain trust in financial systems.

The more immediate concern involves “harvest now, decrypt later” tactics, in which encrypted information is collected today and stored until future quantum hardware can unlock it. Financial institutions may require years to inventory existing cryptography and replace it across payment systems, customer platforms and third-party services. The Bank for International Settlements has treated quantum migration as a current data-protection issue, particularly for information that must remain confidential over long periods. The BIS has completed phases of Project Leap testing hybrid post-quantum encryption and quantum-resistant digital signatures in operational payment environments, finding technical feasibility while noting the need for further performance evaluation.

National Institute of Standards and Technology has finalized three post-quantum cryptography standards covering encryption and digital signatures resistant to both classical and quantum attacks. Organizations are encouraged to begin implementation now. In the United States, executive orders have directed federal systems toward NIST-approved standards, with migration timelines aligned around 2030 to 2031, alongside efforts to advance quantum computing development.

Tokenization Growth Heightens the Stakes

The quantum preparedness framework arrives as Hong Kong expands tokenization under its Fintech 2030 strategy, announced in 2025. Tokenization forms one of four strategic pillars across more than 40 initiatives. Plans include accelerating real-world asset tokenization, regularizing issuance of tokenized government bonds and exploring tokenized Exchange Fund papers. These efforts rely on blockchain settlement supported by e-HKD, tokenized deposits and regulated stablecoins, including work under Project Ensemble.

Since 2023, Hong Kong has issued three rounds of tokenized green bonds totaling about HK$16.8 billion, or roughly $2.1 billion. By the end of 2025, banks in the city held more than HK$14 billion, approximately $1.785 billion, in digital assets under custody, an increase of about 180 percent from the previous year. Tokenized deposits reached HK$29 billion, or about $3.7 billion, according to figures cited by Financial Secretary Paul Chan.

Distributed ledger applications and payment networks depend on cryptography for core functions. Compromises to these protections could produce severe disruption across systems handling digital assets and blockchain-based settlements. Because updating embedded cryptographic infrastructure can take several years, the HKMA has urged banks to begin system inventories, targeted risk assessments and migration planning without waiting for large-scale quantum machines to become available.

Support Measures to Close the Gap

To assist the sector, the HKMA is developing a post-quantum cryptography toolkit in partnership with the Hong Kong University of Science and Technology’s business school and industry participants. The toolkit is intended to help banks identify transition priorities and improve cryptographic agility, allowing replacement of vulnerable algorithms without rebuilding entire systems. Workshops will cover transition planning, technical capabilities and responsible applications of quantum technology.

Future Quantum Preparedness Index readings are expected to track progress from awareness and governance discussions into inventories, pilots and production deployment. The regulator has not disclosed individual bank scores or names of participants and has not indicated how frequently the index will be updated or specified exact dates for toolkit release and workshop schedules. The 2030 target remains a sectoral goal without announced penalties for institutions that fall short of particular scores.

Hong Kong’s approach aligns with broader international timelines for post-quantum transition. As tokenized finance continues to expand, the measurable readiness framework provides a structured path for banks to address long-term cryptographic risks while scaling digital asset and distributed ledger activities.