Coinbase Warns Quantum Computers Could Break Crypto Security, Begins Preparations
Coinbase is warning that the crypto industry needs to prepare for a post-quantum future, developing post-quantum custody technology while contributing engineers and funding to network security efforts. The company says uncertainty remains over when quantum computers could threaten digital assets, making early preparation essential.
Coinbase Chief Information Security Officer Jeff Lunglhofer outlined the company’s position in a July 23 company blog post: “A large-scale quantum computer capable of breaking current cryptography will eventually be built. No one knows exactly when. But the work to prepare needs to start now, not when it’s urgent.”
The company said its Independent Advisory Board on Quantum Computing and Blockchain has high confidence that a fault-tolerant quantum computer will eventually be developed. Coinbase formed the board to assess long-term quantum risks facing digital assets.
Coinbase’s preparations align with broader cybersecurity efforts. In June 2026, the U.S. National Institute of Standards and Technology (NIST) released draft updates to federal post-quantum cryptography standards that incorporate newly standardized quantum-resistant algorithms for identity verification and authentication.
Coinbase is developing PQ-CoreKMS, a post-quantum version of its proprietary key management system that protects approximately 99.9% of the assets it holds in custody. The existing CoreKMS system relies on multiparty computation (MPC), which distributes control of private keys so that no single party can reconstruct a customer’s full key.
Within the next year, Coinbase plans to introduce an automated signing system combining secure enclaves, secret sharing, and threshold cryptography, enabling support for multiple post-quantum signature algorithms. Over the following two to three years, Coinbase researchers intend to expand MPC capabilities further to accommodate lattice-based and potentially other post-quantum signing schemes.
Coinbase will co-host a working session with Stanford in August for Bitcoin Core developers, researchers, and cryptographers. The group will examine potential migration strategies and technical challenges involved in moving bitcoin to quantum-resistant security.
The crypto exchange is also a founding member of the Bitcoin Security Consortium, alongside companies including BlackRock, Fidelity Digital Assets, Block, Blockstream and Strategy. The consortium launched with a $15 million industry initiative to support open-source developers researching Bitcoin’s long-term security. Coinbase said it will also donate to developers working on quantum-related security and assign its engineers to open-source efforts, including proposals such as BIP-360.