SEBI taking steps to ensure system security in quantum computing era: Pandey

The advent of quantum computing may bring big security challenges, and SEBI is engaged in preparing the system to be secure before its adoption, the capital market regulator’s chairman Tuhin Kanta Pandey said on Wednesday.

Pandey said that quantum computing has the technological capabilities to allow bad actors to compromise passwords, which were long assumed to be very secure and, therefore, there is a need to prepare the system on this front.

SEBI has prepared an “action plan” to ensure quantum readiness of all stakeholders it regulates, Pandey said at the annual GFF here.

There is a lot of research going into quantum computing, which will rely on the principles of quantum mechanics to solve complex problems far beyond the capabilities of classical computers, Pandey said.

The career bureaucrat-turned-regulator said there is a possibility that quantum computing is coming and once that happens, the normal cryptography used to set passwords may be the first to break.

“We have quantum secure computing (priority) keeping 2028 or 2029 as the date (when quantum comes) on how we prepare as an industry to go for quantum cryptography based on an action plan where we discover, we prepare, and then we act in the next two-three years,” Pandey said.

Meanwhile, responding to a question on technology neutrality, Pandey said he did not see the ability to continue holding shares in paper form continuing for long in a system that has long moved to dematerialization.

On the concept of technological neutrality, a hotly contested issue, he chose to make his skepticism public with a nuanced take.

“Technology neutrality is actually not possible,” he said, adding that sticking to paper-keeping of stocks will not be beneficial and one must take the best technological position on offer.

Second, there is also the aspect of standardization that technologies must adhere to, Pandey said, adding that the Internet would not have been possible without the protocols to connect an entire network of computers.

“You can only have technological neutrality to the extent that you have multiple technologies that are similar and can connect,” he said.

“As a regulator, I would say we should embrace and embrace technology both for our own good and for the good of the investment community we serve,” Pandey added.