HSBC has claimed to have completed a trial of quantum-secure technology for the purchase and sale of tokenised physical gold.

With the tokenisation of gold, the bank is offering a way to own parts of real gold digitally, meaning no-one will need to hold the physical gold, just a digital token that represents it. This can now be done by both investors and individuals using HSBC’s Orion digital assets platform.

Last year, HSBC began offering tokenised physical gold to institutional investors using distributed ledger technology, and this year launched HSBC Gold Token for retail investors in Hong Kong, allowing them to acquire fractional ownership of physical gold.

As part of the quantum pilot, Quantinuum, one of the world’s largest quantum computing companies, used encryption algorithms and its Quantum Origin randomness technology to show how digital assets like HSBC’s gold tokens can be protected from future quantum computing threats. 

Specifically, the scheme looked to prevent so-called “store now, decrypt-later” (SNDL) cyber-techniques that aim to steal sensitive data now and then store it to decipher the data later, using powerful quantum computers anticipated in the near future. 

The bank hopes that this pilot will be a step in making it harder for even future quantum computers to crack the data.

During the trial, the bank tested how well its gold tokens could work with Quantinuum’s post-quantum cryptography (PQC) algorithms, ensuring digital assets could be safely moved across distributed ledgers without being hacked.

HSBC and Quantinuum also tested the interoperability of its gold tokens including whether they could be converted into ERC-20 tokens (‘fungible’ digital tokens that live on the Ethereum network), allowing for easier use across various digital wallets and platforms.

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“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.” said Philip Intallura, global head of quantum technologies at HSBC.

The bank claims that unlike other common gold products in the market, their Gold Token allows for more flexibility in investing, with each token representing the fractional ownership record of 0.001 troy ounce of gold.