HSBC has successfully trialled the first application of quantum-secure technology for buying and selling tokenised physical gold.

Last year, HSBC was the first global bank to offer tokenised physical gold to institutional investors using distributed ledger technology (DLT). This year saw another first, with the launch of HSBC Gold Token for retail investors in Hong Kong, allowing them to acquire fractional ownership of physical gold.

HSBC also tested the interoperability of its gold tokens using post-quantum cryptography (PQC) to move digital assets safely across distributed ledgers via secure networks, including the capability to convert HSBC’s gold tokens into ERC-20 fungible tokens, enhancing distribution and interoperability with other DLTs and digital wallets.

HSBC worked with future computing firm Quantinuum on the latest pilot, utlising its Quantum Origin randomness technology to demonstrate protection of digital assets, and prevent “store now, decrypt-later” (SNDL) cyber incidents. SNDL is a cyber-technique that has the aim of stealing sensitive data now and then storing it to decipher that data later, using powerful quantum computers in the future.

Philip Intallura, global head of Quantum Technologies, HSBC, says: “HSBC was the first international bank to offer tokenised physical gold and is now building on that innovation with cutting-edge cybersecurity protection for the future. This pilot successfully demonstrated the viability of deploying these advanced technologies for a real-world business environment.”

The achievement marks the latest step by HSBC in pioneering the protection of critical applications from potential future quantum computing attacks.

In December last year, HSBC piloted the use of quantum key encryption to protect client FX trading data from the threat of increasingly powerful cyber attacks.

In July it became the first bank to join BT and Toshiba’s quantum-secured metro network – connecting two UK sites using Quantum Key Distribution (QKD) to prepare its global operations against future cyber threats.

The bank has also struck a multi-year deal with IBM to investigate the technology and is actively recruiting research scientists to build a dedicated capability within its innovation team.

More recently HSBC joined forces with PayPal and other members of Emerging Payments Association Asia to investigate the adoption of quantum-safe cryptography in the payments industry.