Investor Says Quantum Threat Could Reshape Financial Security

Insider Brief

• A Pantera Capital partner argues that the transition to post-quantum cryptography will be slow and uneven in traditional finance but could strengthen a small number of blockchains capable of coordinated global upgrades.
• Legacy financial systems face years of fragmented and risky upgrades because security depends on interconnected software and third-party systems that are difficult to update uniformly.
• Ethereum is cited as a leading example, with its past network-wide upgrade and current push toward quantum-resistant cryptography positioning it to adapt faster than conventional financial infrastructure.
• Photo by fabio on Unsplash

A senior investor in digital assets is warning that the shift to post-quantum cryptography will test the resilience of global finance and could tilt the balance toward a small number of blockchains able to coordinate change at scale.

In a recent post on X, Franklin Bi, a general partner at Pantera Capital, argued that markets are misjudging both the speed and the shape of the transition to cryptography designed to withstand future quantum computers. Founded in 2013, Pantera Capital describes itself as the first U.S. institutional asset manager focused exclusively on blockchain technology. The firm invests in digital assets and blockchain companies across multiple stages, from early startups to liquid tokens, and has been an early backer of several major crypto projects.

Bi said legacy financial systems are likely to move slowly and unevenly, while public blockchains may be better positioned to execute coordinated upgrades across global networks.

Post-quantum cryptography, or PQC, refers to new forms of encryption meant to resist attacks from large-scale quantum computers. Those machines, still under development, could eventually break many of today’s widely used encryption methods by solving certain math problems far faster than classical computers.

Slow Upgrades, Fragile Systems

Bi said traditional financial infrastructure should be expected to struggle with the transition. Banks, exchanges and custodians rely on layers of legacy software, third-party vendors and long upgrade cycles. In that environment, system-wide cryptographic changes tend to be slow, fragmented and prone to weak points that can undermine overall security.

He suggested that even after new standards are introduced, old systems will persist for years, creating a patchwork where security depends on the weakest remaining component. That dynamic, he argued, raises the risk of operational disruption and uneven protection during the transition period.

Blockchain’s Quantum Advantage?

On the other hand, Bi said public blockchains offer a rare example of global systems that can adopt major software changes in a coordinated way. Because blockchains operate on shared protocols, upgrades can be deployed across entire networks when users agree to new rules.

He pointed to Ethereum as a key case study. In 2022, the network completed “The Merge,” a complex transition that changed how Ethereum validates transactions, shifting from energy-intensive mining to a different consensus method. That upgrade is often cited as one of the largest coordinated software changes ever executed on a live global system.

Bi argued that this ability to coordinate change could allow certain blockchains to become secure repositories for data and assets in a post-quantum world, even as traditional systems struggle to keep pace.

The argument comes as the Ethereum Foundation has elevated post-quantum security to a strategic priority. The foundation has established a dedicated effort to study quantum-resistant cryptography and to accelerate planning for a future transition, reflecting growing concern that cryptographic upgrades may take years to deploy.

Such preparation is still largely forward-looking as most experts agree that quantum computers capable of breaking today’s encryption are not yet available. Still, governments and industry groups have begun urging early action, backing their directives with the recognition of the long timelines required to replace cryptographic systems at scale.