By Mackenzie Tatananni
A $2 billion injection of federal funding is giving the quantum computing sector a much-needed shot of adrenaline. But beneath the commercial enthusiasm lies a far more sobering reality.
That's according to Moody's, which designated quantum technology as the next major cyber threat facing financial institutions in a sector report this week. The credit rating agency believes the risk has graduated from a cryptocurrency-specific problem to a broader threat affecting banks and custodians.
"As digital finance markets attract a growing share of institutional clientele, cyber risk linked to blockchain-based platforms has evolved from a niche risk to one that is mainstream," Moody's analysts wrote.
A string of recent, large-scale attacks has drawn attention toward these vulnerabilities. These include a 2024 data breach at Coinbase that exposed the credentials of 70,000 customers, followed by a massive cryptocurrency heist on Bybit -- valued at roughly $1.5 billion -- which the exchange disclosed in 2025.
The risk also extends to quantum computing. Citing Citi Institute research, Moody's noted that a quantum breach targeting payment infrastructure could render between $2 trillion to $3 trillion in indirect economic losses.
Last year, Barron's reported on the rise of cryptographically relevant quantum computers -- theoretical, fault-tolerant machines powerful enough to unravel modern public-key cryptography.
But the threat extends far beyond blockchain technology, which has gained traction at top banks like Goldman Sachs and JPMorgan Chase. Moody's believes a powerful enough quantum computer could jeopardize the entire digital financial infrastructure. Nearly every system, from banking apps to payment gateways, relies on encryption to function.
Experts say these ultra-powerful machines could become a reality before the end of the decade, with some predicting the milestone known as Q-Day could arrive as soon as 2028. Google, one of the leaders in quantum research, adjusted its quantum threat timeline earlier this year to place Q-Day sometime in 2029.
Other threats are already on the radar. In "harvest now, decrypt later" attacks, threat actors are intercepting and storing massive volumes of encrypted data, which they intend to decode as soon as more mature quantum technology becomes available.
Quantum systems' disruptive potential lies in their ability to execute Shor's algorithm, or find the prime factors of an integer in polynomial time. This capability has been showcased in a research setting before, though only by factoring small numbers.
Still, Moody's noted that major players are actively coordinating transition strategies through groups like the G7 and the Bank for International Settlements to avoid a mad dash when Q-Day finally arrives.
The sector report came just days before the U.S. Commerce Department said it planned to award $2 billion in funding to foster the buildout of the quantum computing industry. The deal includes equity ownership in a handful of companies including Rigetti Computing, D-Wave Quantum, and Infleqtion.
Rajeev Bamra, the associate managing director of Moody's Digital Economy Group, believes the scale of federal commitment to the technology reflects growing recognition that the technology is both an economic and national security priority.
The investment comes at the right time. International efforts to lead the quantum race have taken center stage, including China's ambitious Five-Year Plan, which is targeting a nationwide quantum network by 2030.
And while quantum has yet to fully move beyond the lab, Bamra, like others in the financial sector, is monitoring the progress toward Q-Day and warning organizations to start preparing now.
"From a risk standpoint, the more immediate question is how institutions operating in an increasingly digital environment are positioning themselves against the cryptographic implications of quantum advances -- a threat that is not immediate, but is potentially systemic," Bamra told Barron's.
While preparing for a threat of uncertain magnitude is challenging, major institutions are proactively updating their defenses. Moody's highlighted JPMorgan's efforts to test post-quantum cryptography alongside its existing infrastructure and build "crypto-agile" systems designed to rapidly replace vulnerable encryption.
HSBC isn't lagging behind, either. According to Moody's, the bank has tested quantum key distribution, a method leveraging quantum physics to secure data transmissions. The bank has extended these quantum-secure communications across its internal systems and simulated foreign exchange transactions.
There's no other way to get ahead of the problem than to act now, Bamra contended. "Waiting for a definitive inflection point before acting is not a viable risk management posture," he said. "How these dynamics evolve will increasingly reshape the risk profile of institutions operating at this intersection."
Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
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May 22, 2026 15:10 ET (19:10 GMT)
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