Anchorage Digital Details Post-Quantum Strategy for Institutional Crypto Custody

Real, not imagined 

The US’ first federally chartered digital asset bank, on 29 Jul, published a strategy to prepare for post-quantum computing, which refers to upgrading today’s digital security to defend against future advanced computers that use quantum physics to process data and solve math problems in minutes. 

A powerful quantum computer could reverse-engineer the math that locks Bitcoin wallets, allowing bad actors to uncover wallet keys and steal funds. Currently, such an advanced computer capable of breaking Bitcoin’s encryption does not exist.

Nonetheless, "its arrival is a matter of engineering, not imagination," the digital asset custody provider said, noting that Google's recent quantum research points to 2029 as a benchmark year the industry should watch.

Unprotected Bitcoin

Galaxy Research, which started a $5mn Bitcoin Quantum Readiness Initiative on 21 Jul, has estimated approximately 6.9mn BTC – roughly one-third of Bitcoin's circulating supply and worth more than $460bn at recent prices – sit in addresses that already expose public keys onchain.

The report by Anchorage Digital, which holds more than $65bn in digital assets under custody, comes as institutional custodians face growing pressure to prove they can manage the eventual replacement of today’s cryptographic systems.

Others test solutions

The potential risks around quantum computing have galvanized others in the industry as well. In May, US institutional custodian BitGo and Singapore-based cryptography firm Silence Laboratories completed what they described as the first post-quantum Multi-Party Computation (MPC) transaction simulation by a regulated custodian.

BitGo followed the simulation with four Bitcoin quantum-risk management tools on 9 Jul, among them a Quantum Risk Score that flags addresses with exposed public keys and a workflow to migrate funds out of those addresses.

Additionally, Coinbase is developing PQ-CoreKMS, a post-quantum version of its MPC-based key management system, and Fireblocks has outlined a quantum-readiness roadmap. At the blockchain level, Algorand and the Quantum Resistant Ledger have already implemented or deployed quantum-resistant signature technologies in different forms.

Hidden public keys

San Francisco-based Anchorage Digital said it has already put several post-quantum protections into operation. For Bitcoin, its practices keep public keys hidden until a transaction is made, and minimize address reuse.

In addition, the firm has deployed quantum-resistant Transport Layer Security (TLS) across internal systems, "ensuring sensitive internet traffic cannot be exposed," the report said. Anchorage says this is intended to protect communications against 'harvest now, decrypt later' attacks, in which encrypted traffic is collected today and decrypted once more powerful technology becomes available. 

Hardware upgrades

Another current measure uses specialized cryptographic hardware that Anchorage says provides 'cryptographic agility' – the ability to swap algorithms as post-quantum standards evolve, without rebuilding the custody system. 

Looking ahead, Anchorage is developing migration capabilities that would allow client assets to move to post-quantum signing systems once the relevant blockchains support them.

Transfer of signing 

Its research includes a proposed "Post-Quantum Turnstile," a zero-knowledge protocol using STARKs that would let holders of an estimated two-thirds of circulating Bitcoin transfer signing authority to quantum-resistant keys without exposing either the private or public key.

The company is also working on new hardware and broader migration frameworks for legacy digital assets. Whether Anchorage's investments prove commercially decisive will depend on when – and how – Bitcoin itself adopts quantum-resistant standards.