The World Economic Forum (WEF) has issued a concerning warning regarding the susceptibility of central bank digital currencies (CBDCs) to decryption attacks from quantum computer systems. While quantum computers are still primarily in the experimental phase, with various proofs-of-concept and claims of solving unique problems, there remains a period between now and the hypothetical "Q-Day" when bad actors could potentially crack standard encryption using quantum computers.

Although encryption threats would impact numerous industries, the digital asset sector faces an especially significant risk, as highlighted by the WEF. This heightened threat has the potential to compromise the integrity of CBDCs. To address this concern, the WEF emphasized the importance of central banks integrating cryptographic agility into CBDC systems to defend against potential quantum cyberattacks targeting payment infrastructure.

According to a blog post by the WEF on May 21, over 98% of central banks globally are exploring CBDCs, while the private sector is actively pursuing scalable quantum computers. However, there is no consensus among physicists regarding the timeline for quantum computers to advance to the point of posing a threat to current encryption methods, with predictions ranging from a few years to several decades.

The WEF identified three specific threats to CBDCs posed by quantum computing. Firstly, quantum computers could potentially break "in motion encryption," enabling bad actors to intercept transactions in real-time. Additionally, quantum systems could be used for identity impersonation by breaking encryption protecting identity verification systems, allowing for the insertion of spoofed identity assets.

Furthermore, the WEF highlighted the threat of "Harvest now, decrypt later," where encrypted data is stolen by malicious actors and stored for decryption by future quantum systems. Victims may remain unaware of the data breach for years or decades before the threat materializes.

To address these threats, the WEF recommends building CBDCs with quantum-proof protections at their core through cryptographic agility. This approach allows for the orchestration and rotation of cryptographic algorithms based on real-time threats, effectively thwarting evolving attack techniques.