Europe’s three financial watchdogs warned on Wednesday that an advanced quantum computer could undermine the cryptography that secures blockchains, adding regulators’ weight to one of the longest-running debates over the crypto industry’s future. In their Autumn 2026 risk update, the European Banking Authority, the European Securities and Markets Authority, and the European Insurance and Occupational Pensions Authority — collectively the European Supervisory Authorities — said the threat could arrive before quantum computing has any viable commercial use, and urged supervisors and market participants to start preparing now.
What the regulators said
The report describes quantum computing as a technology that “could soon transform the financial sector in key areas” by optimising financial processes, fraud and compliance monitoring, and pricing. But the authorities added that it “could also create major risks, through undermining cryptography systems widely used to secure communications, transactions, databases, and blockchains.” The ESAs said those risks could “materialise faster than any commercially viable application,” meaning the danger to encrypted systems may arrive before the technology’s promised benefits do.
A warning inside a broader risk outlook
The quantum finding sits within a wider assessment that flagged external dependencies and private credit as key vulnerabilities for the EU financial system. The report highlighted the sector’s reliance on information and communication technology providers outside the European Economic Area as a particular concern, and warned that increasingly capable artificial intelligence models could make cyberattacks “more powerful and harder to contain.” The findings were presented to the Financial Stability Table of the EU’s Economic and Financial Committee on 10 September as input from the ESAs.
Why it matters for crypto
The warning lands as blockchain teams accelerate their quantum-readiness work. The Ethereum Foundation has set a 2029 target for making its Layer 1 quantum-resistant, while StarkWare has already executed the first quantum-safe Bitcoin transaction on mainnet. The ESAs told supervisors and market participants to strengthen their preparedness and keep monitoring risks from external dependencies, private credit and emerging technologies, extending a conversation that until recently was confined largely to protocol developers and cryptography researchers. Despite the warning, the authorities noted that the EU financial system has stayed resilient, with banks, insurers and investment funds holding strong fundamentals.
