Digital Asset Security in the Quantum Era

CONTRIBUTORS

Christopher Jensen

Head of Research,
Franklin Templeton Digital Assets

Priti Kumari

Research Analyst
Franklin Templeton Digital Assets

Preview

The advent of quantum computing will not undermine digital assets—but will reorder the hierarchy of trust across the ecosystem. The transition to post-quantum security represents a strategic modernization of digital infrastructure, comparable in scale to Y2K remediation or the migration to IPv6, yet with deeper cryptographic and fiduciary consequences.

WHAT ARE THE RISKS?

All investments involve risk, including the loss of principal.

Digital assets are subject to risks relating to immature and rapidly developing technology, security vulnerabilities of this technology (such as theft, loss or destruction of cryptographic keys), conflicting intellectual property claims, credit risk of digital asset exchanges, regulatory uncertainty, high volatility in their value/price, unclear acceptance by users and global marketplaces, and manipulation or fraud. Portfolio managers, service providers to the portfolios and other market participants increasingly depend on complex information technology and communications systems to conduct business functions. These systems are subject to a number of different threats or risks that could adversely affect the portfolio and their investors, despite the efforts of the portfolio managers and service providers to adopt technologies, processes and practices intended to mitigate these risks and protect the security of their computer systems, software, networks and other technology assets, as well as the confidentiality, integrity and availability of information belonging to the portfolios and their investors.

Any companies and/or case studies referenced herein are used solely for illustrative purposes; any investment may or may not be currently held by any portfolio advised by Franklin Templeton. The information provided is not a recommendation or individual investment advice for any particular security, strategy or investment product and is not an indication of the trading intent of any Franklin Templeton managed portfolio.

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