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Ethereum post-quantum upgrades could force banks to migrate by 2027
Sygnum Bank custody and staking chief Thomas Brunner argues that NIST guidance on stateful hash based signing and hardware key handling could make banks act years before Ethereum sets a layer 1 upgrade target.
Ethereum is developing a post quantum roadmap for its validator cryptography that could require regulated banks to start migrating well before any large scale quantum threat to validator keys, according to CryptoSlate.
Crypto’s post quantum effort would begin with a post quantum validator key registry, then move to replacing today’s BLS validator signatures with hash based alternatives such as leanXMSS, the outlet reported. The BLS scheme uses validator signatures without state management, while leanXMSS relies on one time keys where signing twice with the same index could allow an attacker to forge signatures.
Thomas Brunner, Sygnum Bank’s Head of Custody and Staking, said the biggest mismatch for banks is how NIST SP 800-208 addresses stateful hash based signing. He noted the standard expects private keys to exist in one instance, requires stateful signing to occur inside a hardware module, and restricts export of private key material, which conflicts with common bank resilience practices like backup copies, replication, hot standby, failover, and disaster recovery.
Brunner added that a full cryptographic inventory mapping every place a key lives and what depends on it typically takes six months to a year, and that banks also face vendor certification timelines plus redesign of key ceremonies and dual control procedures, followed by internal risk approval, external audit, and supervisory review when relevant. With Ethereum’s team pointing to a potential layer 1 upgrade completion window of 2029, Brunner said a bank starting its inventory in 2027 would be about on time, the outlet said.
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