SEBI preparing plan to tackle quantum computing threat to crypto and digital security

The Securities and Exchange Board of India (SEBI) is preparing a comprehensive framework to protect the capital markets from the emerging challenges posed by quantum computing, Chairperson Tuhin Kanta Pandey said on Wednesday, October 8. Reported by Zee Business sources, Pandey cautioned that the rapid progress of quantum computing could soon weaken the strength of existing cryptographic systems used across the financial sector. Speaking on the sidelines of the Global Fintech Fest 2025 (GFF) in Mumbai, Pandey said SEBI is already working on strengthening the security of its systems that rely on cryptography-based passwords. "Wherever in the financial sector or elsewhere cryptography is our standard key for passwords, we need to prepare for it and develop cryptography-proof systems, as quantum computing will eventually break current encryption models," he said.

Quantum computing may redefine digital security

Quantum computing, Pandey explained, represents a significant technological leap that could outpace the defences of current digital systems. Using quantum bits (qubits) that can exist in multiple states at once, quantum computers can process vast amounts of data simultaneously, making them capable of solving complex problems in seconds that would take classical computers years.

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This advancement, however, poses a major security concern. "Since cryptography is the backbone of digital systems - including cryptocurrencies and stablecoins - these could be among the first to face vulnerabilities," the SEBI chief noted. He said the regulator's priority is to ensure that all cryptography-based systems in the capital market remain secure in the coming quantum era.

Technology at the core of market reform

In his keynote address at the fintech event, titled 'Resilient and Inclusive Capital Markets in a Tech-Driven World', Pandey said technology has transformed every aspect of India's securities ecosystem - from investor onboarding and settlements to grievance redressal and surveillance.

"Today, the Indian securities market is shaped by reforms and an ecosystem that is vibrant, resilient and inclusive. Technology is at the core of every step," he said. Pandey added that SEBI's three guiding priorities - investor protection, market development and effective regulation are now deeply supported by technological innovation.

He credited SEBI's coordination with exchanges, depositories and technology partners for strengthening investor confidence. "We have built an ecosystem where the regulator, industry and intermediaries work together. That coordination is our biggest strength," he said.

Building a secure future for investors

Pandey emphasised that as markets expand rapidly, the focus must remain on balancing innovation with security. "The question is not only how fast we grow, but how safely," he said.