RBI panel to examine quantum technology risks in financial sector

• The Reserve Bank of India (RBI) announced the setting up of an eight-member expert committee to explore and evaluate the potential benefits, risks and challenges of quantum technology in the financial sector.

What is the scope of this panel?

• Quantum technology represents a paradigm shift compared to traditional systems as it leverages the principles of quantum mechanics, such as superposition and entanglement.

• This enables quantum systems to address complex financial problems such as portfolio optimisation, risk assessment, and macroeconomic modelling.

• However, quantum technologies can also introduce significant risks, particularly the potential to undermine certain existing cryptographic standards.

• To examine the related issues, RBI has decided to constitute an Expert Committee for a Quantum Secure and Adaptive Financial Ecosystem (Q-SAFE).

• The committee has been asked to evaluate the financial sector’s cryptographic inventory through a Cryptography Bill of Materials (CBOM), assess crypto agility and identify the critical systems and processes most vulnerable to such threats.

• It will also evaluate industry preparedness for quantum-safe cryptography adoption, including the availability, scalability, and maturity of vendor tools and solutions, and recommend a roadmap and framework to quantum-secure the Indian financial system.

• Anil Prabhakar, professor, Department of Electrical Engineering, IIT Madras, has been appointed as convener of the committee.

• The committee will submit its report within six months from the date of its first meeting.

Additional Read:

What are quantum technologies?

Quantum technology is based on the principles of quantum mechanics developed in the early 20th century to describe nature at the scale of atoms and elementary particles. The range of quantum technologies is expected to be one of the major technology disruptions that will change the entire paradigm of computation, communication and encryption.