Coinbase prepares crypto for future quantum security threats

Why Quantum Computers Matter to Crypto

Jeff Lunglhofer, Coinbase’s Chief Information Security Officer, made the case direct in a July 23 company blog post. A large-scale quantum computer capable of breaking current cryptography will eventually emerge. The timeline is uncertain. But preparation must start now, not when the threat arrives.

Current cryptographic systems that protect blockchain assets rely on mathematical problems that are hard for classical computers but potentially solvable for quantum computers. Once that happens, billions in assets could be at risk.

Coinbase’s Quantum-Safe Blueprint

Coinbase is developing PQ-CoreKMS, a post-quantum version of its proprietary key management system currently protecting approximately 99.9% of its custodial assets. The strategy unfolds in phases:

• Next 12 months: Launch an automated signing system combining secure enclaves, secret sharing, and threshold cryptography with multiple post-quantum signature algorithms
• Next 2-3 years: Expand multiparty computation (MPC) capabilities to include lattice-based and other post-quantum signing schemes
• Ongoing: Allocate engineers to open-source security efforts and fund developers working on quantum-resistant solutions

Federal Standards Are Finally Moving

Coinbase’s urgency reflects a broader shift in the cybersecurity landscape. In June 2026, the U.S. National Institute of Standards and Technology (NIST) released draft updates to federal post-quantum cryptography standards. These updates incorporate quantum-resistant algorithms for identity verification and help federal agencies and industry adopt new technologies while maintaining interoperability.

For crypto, that means standards are crystallizing. The time to build is now, before the entire ecosystem needs to migrate at once.

Bitcoin’s Quantum Challenge Requires Collaboration

The quantum threat to Bitcoin is particularly acute because the network’s security model depends on specific cryptographic assumptions. Bitcoin Core developers, researchers, and cryptographers need to coordinate on migration strategies before a quantum threat materializes.

Coinbase will co-host a working session with Stanford in August to bring these groups together. The exchange is also a founding member of the Bitcoin Security Consortium, an industry initiative with a $15 million fund that includes BlackRock and Fidelity Digital Assets. The consortium supports open-source developers researching Bitcoin’s long-term security and quantum resilience.

This collaborative approach signals a fundamental shift in how the industry views security. No single company can solve quantum resistance alone. It requires researchers, developers, protocols, and companies moving together.

The Real Stakes

Lunglhofer put it bluntly: “No one company can solve this alone. The only way through is together: researchers, developers, protocols, and companies all moving in the same direction.”

That’s not just institutional cooperation speaking. It’s recognition that quantum computing will eventually arrive, and when it does, the industry that prepared will survive. The one that didn’t won’t.

Coinbase’s move to develop quantum-safe custody, fund open-source efforts, and coordinate industry initiatives isn’t altruistic. It’s strategic necessity. And that’s exactly the message the rest of crypto needs to hear.