Coinbase explores post-quantum custody for $250 billion in assets

Coinbase is exploring post-quantum custody architecture for roughly $250 billion in institutional assets. The architecture combines post-quantum threshold decryption with programmable Hardware Security Modules. Coinbase is researching the hardware system as a fallback if Bitcoin adopts a post-quantum scheme that is incompatible with Multi-Party Computation. Multi-Party Computation allows separate parties to hold portions of a private key. A required quorum of key shares can authorize transactions without assembling the complete key in one location. Some hash-based post-quantum signature schemes may be difficult to use with Multi-Party Computation. Yehuda Lindell said it remains unclear whether researchers can develop a viable Multi-Party Computation-like system for hash-based signatures. Dan Boneh is researching possible solutions described in the PRAWNS paper. Ledger chief technology officer Charles Guillemet has also raised concerns about hash-based signatures. Under Coinbase’s fallback design, post-quantum cryptography would encrypt private keys. The keys would be assembled only inside physically secure Hardware Security Modules. Lindell said the modules’ physical side-channel protections and code-upload controls support the design. Coinbase is designing its custody architecture to support whatever signing scheme Bitcoin adopts in the coming years. The timeline for completing the post-quantum security measures remains uncertain.