The Bank for International Settlements (BIS) in tandem with Swift and central banks from Italy, France and Germany has uncovered key challenges facing the financial system to ensure resilience in a post-quantum world.

Project Leap Phase 2, a collaboration between the BIS Innovation Hub Eurosystem Centre, the Bank of Italy, the Bank of France, Deutsche Bundesbank, Nexi-Colt, and Swift, tested post-quantum cryptography in an operational payment system.

Protecting financial systems from the potential threat posed by quantum computers requires a proactive and coordinated approach, says the BIS, noting that challenges go beyond technical aspects and include awareness, resource allocation, competence development, inventory, pilots, governance and more.

The experiment replaced traditional digital signatures with post-quantum cryptography when sending liquidity transfers in the Eurosystem’s Target2 system. It involved modifying numerous system components to ensure compatibility with updated cryptographic libraries.

All test scenarios were successfully executed, demonstrating the feasibility of migrating payment systems to post-quantum cryptography. The tests also revealed significant performance differences between traditional and post-quantum algorithms, pointing at the need for further testing and preparation before transitioning the financial system.

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