EU Watchdogs Flag Quantum Risks for Blockchain Cryptography

The Joint Committee of the European Supervisory Authorities, which includes the EBA, EIOPA, and ESMA, emphasized in a September 23 update that the risks to transaction security and databases may materialize faster than commercially viable quantum applications. Their concern centers on the potential for quantum systems to employ Shor’s algorithm to crack the elliptic-curve cryptography that secures Bitcoin ownership and transaction authorization.

Estimates regarding current exposure vary, but the scale of the potential vulnerability is significant. CryptoQuant founder Ki Young Ju estimates that roughly 6.89 million BTC could be susceptible to quantum attacks due to public-key exposure, while Glassnode analysis identifies approximately 6.04 million BTC with similar risks. These figures include both coins with structurally exposed keys and those vulnerable due to address reuse or legacy custody practices.

To mitigate these dangers, the European Commission has mandated that member states begin migrating toward post-quantum cryptography by the end of 2026, with high-risk infrastructure transitions to be completed by 2030. Within the Bitcoin ecosystem, developers are exploring solutions such as BIP-360 and BIP-361, which propose quantum-resistant output types. However, these remain in the draft stage, leaving the industry to grapple with the immense technical and consensus challenges of updating a decentralized ledger without a clear, unified path forward.