EU Watchdogs Warn Quantum Computing Could Break Blockchain Encryption

Europe’s three financial watchdogs warned on Wednesday that an advanced quantum computer could undermine the cryptography that secures blockchains, adding regulators’ weight to one of the longest-running debates over the crypto industry’s future. In their Autumn 2026 risk update, the European Banking Authority, the European Securities and Markets Authority, and the European Insurance and Occupational Pensions Authority — collectively the European Supervisory Authorities — said the threat could arrive before quantum computing has any viable commercial use, and urged supervisors and market participants to start preparing now.

What the regulators said

The report describes quantum computing as a technology that “could soon transform the financial sector in key areas” by optimising financial processes, fraud and compliance monitoring, and pricing. But the authorities added that it “could also create major risks, through undermining cryptography systems widely used to secure communications, transactions, databases, and blockchains.” The ESAs said those risks could “materialise faster than any commercially viable application,” meaning the danger to encrypted systems may arrive before the technology’s promised benefits do.