Coinbase builds quantum-safe custody system protecting 99.9% of assets

Coinbase is expanding preparations for a future in which advances in quantum computing could eventually undermine the cryptography used by Bitcoin and other blockchain networks, while stressing that the threat is not immediate. Chief Executive Officer Brian Armstrong said the industry needs to begin preparing now because no one can reliably predict when fault-tolerant quantum computers will arrive, even as current machines remain far from the scale needed to break Bitcoin’s elliptic curve cryptography. At the center of Coinbase’s response is PQ-CoreKMS, a post-quantum version of the company’s proprietary key management system. Coinbase said its current CoreKMS protects about 99.9% of the digital assets it holds in custody. The exchange also said its quantum-focused board has high confidence that fault-tolerant quantum computers will eventually be built, but that the harder challenge for crypto is not the math alone: it is coordinating a secure migration across decentralized networks and millions of users. Bitcoin is a major focus of that effort. Armstrong said Coinbase, BlackRock, Fidelity Digital Assets, Block, Blockstream, Strategy and other industry participants are launching the Bitcoin Security Consortium to support the network’s long-term security and prepare for a future quantum transition. Coinbase said it will co-host working sessions with Bitcoin Core developers, cryptographers and researchers beginning in August, while contributing engineering resources and funding. The broader backdrop is that NIST has already standardized the first post-quantum cryptographic algorithms, and governments and technology companies have begun shifting critical infrastructure toward them. For Bitcoin, proposed migration paths include quantum-resistant signature schemes, moving funds to upgraded addresses and protocol changes through future Bitcoin Improvement Proposals, all of which would require broad consensus.