Protecting Tokenized Assets From the Quantum Computing Threat

Tokenization security will soon take center stage

Put simply, RWA tokenization is the process of issuing a blockchain token that legally represents ownership of an off‑chain asset, like a Treasury bill, a commodities contract, or even a single‑family mortgage or property deed. 

The token acts as a digitally native title that can settle peer‑to‑peer in seconds without manual reconciliations. Asset managers love that speed because it squeezes out back‑office costs and frees up collateral that was once stuck in overnight limbo.

The business case goes deeper. Blockchains allow fractional slices of assets to trade globally, opening markets to new investor classes while enhancing price discovery. A recent BIS working paper argues that tokenization could trim funding costs in cross-border transactions. 

BlackRock proved there is real money behind the hype when its BUIDL Treasury fund crossed $2.9 billion in assets within months. JPMorgan now moves bond collateral in minutes on its Tokenized Collateral Network. Researchers expect aggregate tokenized value to reach $30 trillion by 2030. 

All that value is guarded only by elliptic‑curve (ECC) signatures that a large quantum computer can forge.

Quantum computing versus blockchain signatures

Let's run through a quick refresher about how quantum computing poses a threat to all ECC signatures.

Shor’s algorithm converts factoring and discrete‑log problems (the mathematical bedrock of RSA and ECC) into quick work once enough logical qubits exist. An attacker could then extract private keys from public keys, sign false transfers, and make fraudulent ownership immutable.

Momentum on that front is picking up. Global qubit capacity is advancing rapidly, outpacing the traditional Moore’s law slope. Deloitte warns many blockchains may be exposed to "harvest now, decrypt later" risks as adversaries archive public keys for future exploitation. 

Preparations remain uneven. Some chains have started the hard engineering work, whereas others still treat post‑quantum cryptography (PQC) as a theoretical solution rather than a concrete set of steps to implement for security. 

The table below clarifies who is doing what, and how credible a few of the leading blockchain mitigation plans look.

Leading Blockchain Mitigation Plans

Two quick observations tell the story here. 

First, only XRP Ledger and Algorand commit to a timed migration path. Second, more than half the chains still depend on secp256k1, the same curve Bitcoin uses, exposing them to identical break‑once‑break‑all risk. They aren't prepared. And they might not ever be, unless preparation is prioritized -- and it currently is not. 

Furthermore, NIST’s FIPS 204 finalized ML‑DSA signatures last summer, giving developers a clear standard. So there's an easier path to quantum security than ever before. There's no need for devs to get creative and try to roll their own crypto.

Yet many projects hesitate because key sizes balloon and wallet UX gets harder. Those trade‑offs will grow costlier as regulatory sandboxes start rewarding quantum‑ready designs with faster approvals.

What a quantum heist on RWAs would look like

Quantum attacks on RWAs are, for now, only hypothetical. Still, it's critical to understand what one would look like.

An attacker could scrape public keys, feed them into a fault‑tolerant quantum rig, derive private keys, sign transfers, convert the loot into liquid stablecoins, and exit through privacy pools. Because blockchains are append‑only, unwinding that fraud requires a fork and prolonged litigation. And in the meantime, someone else would control the most valuable assets in your portfolio. 

Five RWA categories stand out as ones which criminals would target first, as they're fungible and easily disbursable into massive and deeply liquid markets:

• Tokenized Treasury bills

• Commodity contracts and futures; options contracts

• Synthetic equities (ETFs, ETNs)

• Tranches of mortgages or vehicle loans pledged as collateral and aggregated as financial instruments for institutional investors

• Tranched or untranched consumer and mega-cap business debentures

A single spree could freeze collateral pools, shatter lender confidence, and undermine the very premise of instant transaction settlements. Worse, victims would still owe coupon payments or property taxes even after losing their on‑chain title, triggering real‑world legal chaos.

Security analysts stress that token fungibility magnifies laundering velocity significantly. Once counterfeit signatures move assets into decentralized exchanges, tracing proceeds becomes exponentially harder.

But that doesn't mean holders of tokenized non-fungible assets, like property rights or the deeds to specific physical assets, are off the hook either. RWA theft will become common if not properly guarded against, especially in regions like Dubai, where tokenization is rapidly becoming the go-to method for transactions and asset management, and where asset holders often maintain large portfolios.

Building a quantum‑resilient tokenization stack

Practical mitigation measures do exist, and they should be implemented today to the extent it's possible.

PQC adoption is less about headline algorithms and more about operational discipline. Chains, custodians, and issuers must coordinate timelines or risk leaving a weakest‑link gap that attackers will exploit. Here are the avenues to pursue to protect your platform and your assets.

Near‑term hardening

Hybrid signature modes demand both an elliptic‑curve and a post‑quantum signature during migration, buying time while tooling matures. 

Chains should rotate keys on predictable schedules and hide public keys until first spend to frustrate harvest‑now‑decrypt‑later tactics. A growing roster of institutional custodians, led by BitGo, already offers dual‑signature APIs.

Developers should also closely examine audit pipelines, a relatively cheap win that surfaces assumptions buried deep in signing libraries.

Long‑term migration

Full adoption of lattice or hash‑based signatures requires crypto‑agile governance so validators can upgrade without disruption. 

Regulators are nudging hard here. The SEC’s cyber disclosure rule treats foreseeable quantum exploits as material risk, and Europe’s DORA framework links operational resilience to cryptography updates.

Here's a quick checklist for selecting a chain or custody partner:

• Verify a published post‑quantum migration schedule

• Require dual‑signature hardware wallet support

• Fund bug bounties for lattice and hash libraries

• Favor address schemes that hide public keys pre‑spend

• Watch insurance premiums and SEC filings for quantum clauses

Insurers have begun pricing these controls explicitly. 

Eventually, there may be premium discounts for custodians that pass a quantum‑safe readiness audit. 

Capital, compliance, and the ticking clock

The road to PQC looks uneven. That unevenness feeds directly into capital‑allocation math.

Institutional allocators now model "crypto‑lifecycle risk" alongside counter‑party risk. That makes sense, as it's obvious why crypto treasurers would pay higher fees for a quantum‑safe chain today rather than risk an emergency migration later. 

“Q‑Day” remains uncertain, yet money already prices quantum readiness into valuations. There has been a wave of SEC cyber enforcement for sloppy disclosures, while insurers quote lower premiums to custody providers that pass quantum‑safe audits. If trillions in deeds and bonds migrate to chains that never finish their cryptography upgrade, the market will discover that a permanent ledger is useless once signatures can be forged.

Investors do not need clairvoyance, just urgency. Every year of delay shifts quantum risk from tail event to core scenario. The chains that treat PQC as a first‑class feature will capture the lion’s share of tokenized flows, while laggards watch smart money walk away.

Assuming you don't want to get your house hacked out of your possession, quantum security is not a side quest; it is becoming the main storyline. 

Sources:

• Google’s 105-Qubit Willow Chip Achieves Major Quantum Milestones

• Cybersecurity in the Quantum Risk Era

• Analysing tokenised assets

• BlackRock's $2.9B Tokenized Treasury Fund BUIDL Accepted as Collateral

• Tokenized Collateral Network

• RWA Tokenization Is Going to Trillions Much Faster Than You Think

• FIPS 204: ML-DSA Digital Signature Standard

• 2025 Global Digital Trust Insights

• Next-Generation Post-Quantum Cryptography #79

• Post-Quantum Blockchain Technology

• Final Rule: Cybersecurity Risk Management, Strategy, Governance

• DORA and Your Quantum-Safe Cryptography Migration

• Wave of cyber-related SEC enforcement activity may signal increased scrutiny

• Managing the Quantum Cybersecurity Threat

• Are Corporate Directors Ready for the Cybersecurity Reckoning?

• Impact of DLT on Global Capital Markets

• XLM Quantum Computing Security

• Cornell IC3 Accelerator