Note: both experts quoted sell solutions to the problem they describe. Alex Pruden runs Project Eleven, which builds the custody platform discussed, and Christopher Smith runs Quantus, the post-quantum chain being integrated with it.
- Bitcoin, Ethereum and other networks are unlikely to settle on the same post-quantum signature scheme or the same migration timetable. A bank or custodian holding several assets may therefore have to accommodate several different forms of cryptography simultaneously, without weakening the controls governing who can approve, sign and audit a transaction.
- Project Eleven and the privacy-focused proof-of-work chain Quantus are targeting the first quarter of 2027 to let institutions manage Quantus keys and approve transactions through hardware security modules, internal policies and audit systems.
- Project Eleven’s platform, Strongpoint, is designed to separate the institutional control layer from the signature scheme used by the underlying blockchain, so a custodian could keep its approval process, hardware key storage and audit trail intact even as a chain changes its cryptography. Pruden said it is not a replacement for protocol-level adoption but allows protocols to be supported more flexibly.
- Quantus uses ML-DSA, a post-quantum signature standard selected by the US National Institute of Standards and Technology. Smith argued that AI is accelerating both quantum hardware and software, and that the tail risk of a surprise quantum attack should be factored into portfolio decisions as a matter of fiduciary responsibility.
What Happened?
The discussion follows calls for crypto holders to move funds into what has been described as bunker mode before advances in AI or quantum computing expose wallet keys. Pruden said a difficult transition could impede institutional adoption of cryptocurrency, and that institutions are already preparing for the post-quantum shift outside of blockchains. The timing of a computer capable of attacking bitcoin or ether remains uncertain, and any network migration would require broad agreement among developers and users.
Why It Matters?
The reframing here is useful even allowing for who is making it. The institutional difficulty is not replacing one cryptographic algorithm with another, which is a solved engineering problem, but handling several chains adopting different standards on different schedules while preserving a single coherent system of approvals, segregation of duties and audit trails. That is an operations and controls problem, and controls are precisely what institutional custody sells. A custodian running three incompatible signature schemes has three times the surface area for a control failure, and control failures rather than cryptographic breaks are what actually cost clients money. The timing asymmetry is the awkward part. Nobody can say when a capable quantum computer arrives, yet a network migration requires years of developer and user consensus, so preparation has to begin well before the threat is demonstrable, which is exactly when it is hardest to justify the spending. Pruden’s observation that institutions are already migrating outside blockchains is the relevant benchmark, because it means crypto custody is behind the traditional finance counterparties it wants to serve. The timing matters for a second reason. The SEC has just proposed rules permitting investment advisers to custody digital assets, which is the change that would bring advisory client money into crypto custody at scale. That expansion is being designed now, with this question unresolved beneath it. Advisers evaluating custody arrangements under the new framework have a reasonable basis to ask what a provider’s post-quantum plan is, and Smith’s fiduciary framing, discounted for his commercial interest, is not unreasonable on that narrow point.
What Next?
The first quarter of 2027 target for the Quantus integration is the dated item, though it concerns one small chain rather than the assets institutions actually hold. The more consequential developments are the bitcoin and ethereum migration debates, since those determine what custodians must eventually support, and neither has settled on a scheme or a timetable. Watch whether large custodians publish post-quantum roadmaps, which would indicate the issue has moved from vendor marketing to procurement requirement. The SEC custody rules now in consultation are where any regulatory expectation would appear, and the comment period is the place to look for whether supervisors treat this as a live concern.
Affected Tickers and Coins: BTC, ETH, COIN
Source: CoinDesk
