New Delhi: As the potential of quantum computing looms closer, the Securities and Exchange Board of India (SEBI) is taking proactive steps to ensure the safety and resilience of the capital market ecosystem. SEBI Chairman Tuhin Kanta Pandey highlighted the importance of preparing for the technological shift during his address at the annual Global Fintech Fest (GFF) on Wednesday.
Quantum Threats to Cybersecurity
Pandey emphasized that the advent of quantum computing could pose serious security challenges, especially in compromising encryption systems that have so far been considered highly secure. Traditional cryptographic methods, such as those used for password protection, could be rendered obsolete once quantum computing becomes mainstream.
“Quantum computing has the technological capabilities to make it possible for bad actors to compromise passwords, which were long presumed to be very secure,” said Pandey.
Action Plan for Quantum Readiness by 2028–2029
To mitigate future risks, SEBI has crafted a comprehensive “action plan” aimed at making all its regulated stakeholders quantum-ready. The plan includes a phased approach: discovery, preparation, and action — all to be executed over the next 2–4 years.
“We have quantum-safe computing (priority) keeping 2028 or 2029 as the date when quantum comes, and we are preparing ourselves as an industry to go for quantum-safe cryptography,” Pandey stated.
Quantum Computing: A Paradigm Shift
Highlighting the transformative nature of quantum technology, Pandey noted that quantum computing, based on the principles of quantum mechanics, could solve complex problems beyond the capabilities of classical computers.
He stressed the need for early adaptation to this shift to protect financial markets and ensure investor confidence.
No Future for Paper-Based Shareholding
On another front, Pandey dismissed the feasibility of continuing with paper-based shareholding in a modernized financial system that has largely transitioned to digital platforms.
“I do not see the ability to continue holding shares in a paper form for long in a system which has transitioned to dematerialization,” he said.
Technology Neutrality: A Myth?
Addressing the contentious topic of technological neutrality, Pandey expressed skepticism, arguing that total neutrality is not practical in a complex and interconnected ecosystem. While diversity in technology can exist, it must adhere to common standards for interoperability.
“Technology neutrality is actually not feasible,” he remarked. “You can have technology neutrality only to an extent where multiple technologies which are similar and which can connect.”
SEBI’s Commitment to Innovation and Investor Safety
Wrapping up his remarks, Pandey reinforced SEBI’s commitment to adopting and embracing the best technologies available — not only for the regulator’s operational efficiency but also for the benefit of the wider investor community.
“As a regulator, I would say that we should adopt and embrace a technology both for our own good and for the good of the investor community we serve,” he concluded.
