Banks and Regulators Join Cross-Regional Pilot to Test Quantum-Resistant Digital Asset Security

Banks and financial regulators across Europe, the Middle East and Asia are joining forces on a new pilot designed to test how digital-asset infrastructure could withstand the security challenges posed by future quantum computers.

The initiative, announced on Aug. 24, will examine post-quantum security for digital-asset wallets and blockchain-based transfers, bringing financial institutions, regulators and technology providers together to test new cryptographic standards before quantum computing becomes capable of threatening today's security systems.

The project is being organized by the Institute for Responsible FinTech in partnership with Safeheron, a digital-asset custody infrastructure provider serving as the initiative's technology partner.

At its core, the exercise is about preparation. Financial institutions are being asked to determine how they could migrate from today's cryptographic systems to new signing technologies without disrupting the infrastructure responsible for securing digital assets.

A Real-World Test for Quantum-Resistant Wallets

Bison Bank and DK Bank will initially test the creation of digital wallets and blockchain transfers within a shared application environment.

The Abu Dhabi Global Market, Bhutan's Geliefu Financial Services Office and the Malta Financial Services Authority will participate initially as observers.

The pilot does not mean quantum computers can currently break into the participating banks or compromise the NEAR network. Instead, it is a controlled exercise designed to test how financial institutions could adopt new cryptographic standards ahead of a potential future quantum threat.

Safeheron has developed a multi-party computation protocol supporting ML-DSA-65, a security level associated with the ML-DSA digital-signature standard incorporated into the U.S. National Institute of Standards and Technology's FIPS 204.

The combination is significant because institutional digital-asset custody increasingly relies on sophisticated methods for distributing control over private keys, while post-quantum cryptography is designed to protect digital signatures against attacks that could eventually be enabled by sufficiently powerful quantum machines.

ML-DSA Builds a Path Toward Post-Quantum Signatures

NIST finalized FIPS 204 in August 2024, establishing ML-DSA as one of its standards for digital signatures designed to withstand potential attacks from quantum computers.

But adopting a post-quantum algorithm alone does not guarantee security.

The protection provided by a cryptographic system depends heavily on implementation, key management, software architecture and ongoing security testing. An algorithm that is theoretically resistant to quantum attacks can still be vulnerable if implemented incorrectly.

That is where multi-party computation becomes relevant.

MPC allows multiple parties or devices to participate in signing a transaction without reconstructing the complete private key in a single location. Combined with post-quantum signatures, the approach could provide financial institutions with a potential framework for protecting digital-asset wallets against both existing and emerging attack vectors.

The pilot will therefore test not simply a new cryptographic algorithm, but how that technology interacts with an institutional custody model.

NEAR Testnet Provides the Testing Ground

The initiative will use the NEAR testnet to create wallets and conduct blockchain transfers in an environment designed for testing quantum-resistant functionality.

However, several important details remain undisclosed. Organizers have not yet specified the assets involved, transaction volumes, testing timeline or the precise benchmarks that will determine whether the technology performs adequately.

The exercise also does not involve NEAR's public mainnet or customer funds.

That distinction matters. Success in a controlled test environment would demonstrate technical feasibility, but it would not by itself establish that the infrastructure is ready for deployment across live institutional markets.

Regulators will observe the technical work during the initial phase rather than directly executing the transactions. Their involvement will vary according to each institution's jurisdiction and regulatory mandate.

The Experiment Extends Beyond Cryptography

The pilot is also expected to examine governance, operational resilience and cross-border interoperability.

That could make the project particularly relevant to financial institutions, where cybersecurity cannot be separated from regulatory compliance, operational continuity and risk management.

The Institute for Responsible FinTech's chairman, Chia Hock Lai, said the challenge cannot be addressed by a single bank, technology provider or regulator, framing the initiative as an effort to establish a common reference point for security and compliance.

That collaborative approach reflects the scale of the potential transition.

Replacing cryptographic infrastructure across financial systems would require coordination between banks, custodians, blockchain networks, wallet providers, regulators and technology vendors.

Safeheron Plans to Open-Source the Protocol

Safeheron has said it eventually intends to release the protocol as open-source software, allowing independent researchers to examine its implementation.

The organizers also plan to publish a research paper covering the project's research, protocol design and testing results.

Neither the paper nor the software release has been given a specific publication date.

Until those materials become available, external researchers will have limited ability to independently assess the protocol's implementation, performance and security assumptions.

That makes the eventual publication an important milestone for determining whether the project can move beyond a controlled institutional experiment.

Financial Regulators Are Preparing for the Quantum Era

The initiative is part of a broader effort by financial authorities to prepare for quantum computing.

In a July 2025 roadmap, the Bank for International Settlements warned that the transition to post-quantum systems should not be treated as a simple exercise in replacing one cryptographic algorithm with another.

Banks first need to identify where current cryptographic technologies are being used, understand their dependencies on external service providers and establish systems capable of switching between different cryptographic methods.

The BIS also recommended coordinated planning, layered defenses and hybrid systems, alongside a gradual transition rather than a sudden replacement of existing infrastructure.

The underlying message is clear: quantum readiness is as much an operational challenge as it is a cryptographic one.

Hong Kong Is Already Measuring Quantum Readiness

Hong Kong is among the jurisdictions assessing how prepared its financial sector is for the coming challenge.

According to figures cited in the report, the city's banking sector scored just 2.3 out of 10 on a quantum-readiness index, while 32% of surveyed banks had not yet begun preparations.

The Hong Kong Monetary Authority is targeting full quantum-risk readiness across the banking sector by 2030.

The approach reflects a growing recognition among regulators that quantum risk needs to be addressed well before quantum computers become powerful enough to exploit weaknesses in existing cryptographic systems.

For financial institutions, waiting until the technology becomes operationally dangerous could leave too little time to replace deeply embedded security infrastructure.

Blockchain Networks Are Preparing Too

Traditional financial institutions are not the only ones preparing for the quantum threat.

Blockchain developers are also exploring ways to make networks resistant to future quantum attacks.

The Algorand Foundation, for example, has set a 2027 target for comprehensive quantum resilience across accounts, wallets, verification tools and consensus mechanisms.

Bitcoin developers have also proposed new transaction formats designed to protect funds against future quantum attacks. Moving existing assets into quantum-resistant outputs, however, would require broad coordination among users, wallets, exchanges and custodians.

This presents a particularly difficult challenge for decentralized networks. Unlike a conventional financial institution, there may be no single authority capable of ordering every participant to migrate simultaneously.

The Next Tests Will Determine Whether the Technology Is Ready

The next stages of the cross-regional pilot will involve completing wallet and transfer tests, examining governance and publishing the project's research and core software.

Those results will be crucial.

The real question is not simply whether post-quantum signatures can resist theoretical quantum attacks. It is whether they can deliver that protection while maintaining the performance, interoperability, custody controls and compliance requirements expected from institutional financial infrastructure.

A cryptographic system can be highly secure on paper and still prove impractical if it is too slow, expensive or difficult to integrate into existing systems.

Quantum Risk Is Becoming an Operational Problem

The significance of the initiative ultimately goes beyond the technology being tested.

For years, quantum computing has largely been discussed as a future threat to cryptography. Financial institutions are now beginning to treat it as an infrastructure problem that requires preparation today.

The challenge is not simply whether a sufficiently powerful quantum computer could eventually break existing cryptographic protections. It is whether banks, digital-asset platforms, custodians, blockchain networks and regulators can coordinate a global transition before that threat materializes.

That means the success of post-quantum adoption will be measured not only by the strength of new signatures, but by how effectively they can be integrated into the financial systems that already move and safeguard trillions of dollars.