--- title: "What Is Quantum Computing, and Why Does Finance Care?" description: "A fundamentally different kind of computer is inching out of the lab. The near-term payoff for banks is modest and experimental; the longer-term threat to the encryption that secures global finance is what keeps security teams up at night." category: "Tech" category_url: https://boursel.com/category/tech author: "Marcus Feldman" published: 2026-06-26T19:42:00.000Z updated: 2026-06-26T19:42:00.000Z canonical: https://boursel.com/article/what-is-quantum-computing-and-why-does-finance-care tags: ["quantum-computing", "cryptography", "nist", "cybersecurity", "banking-tech"] --- # What Is Quantum Computing, and Why Does Finance Care? A fundamentally different kind of computer is inching out of the lab. The near-term payoff for banks is modest and experimental; the longer-term threat to the encryption that secures global finance is what keeps security teams up at night. *This is general information, not investment advice.* Quantum computing fills corporate keynotes and venture pitches. Stripped of hype, here's what it actually is — and the one corner of finance where it genuinely matters. ## What it is, in plain terms A classical computer stores information in **bits** that are either 0 or 1. A quantum computer uses **qubits**, which exploit two quantum properties. **Superposition** lets a qubit represent a blend of 0 and 1 at once, not one fixed value. **Entanglement** links qubits so their states are correlated — measuring one instantly constrains the others. Together, [as IBM explains](https://www.ibm.com/think/topics/quantum-computing), these let a quantum machine explore many possibilities in parallel for *certain* problems. (IBM's qubits are tiny superconducting circuits chilled to near absolute zero.) ## What it is *not* A quantum computer is not just a faster laptop. It helps only on specific problems — optimization among vast combinations, simulating molecules and materials, and certain math like factoring large numbers. For everyday tasks it's no better, often worse. The eye-popping milestone figures — Google's 2019 "supremacy" claim, or its 2024 **Willow** chip beating a "10²⁵ years" benchmark — apply to **contrived tasks with no practical use** (Google says as much). What made Willow notable, in a peer-reviewed *Nature* result, is that **adding qubits reduced the error rate** — a long-sought sign that error correction can scale. ## The hard part: errors There's no clear hardware winner. IBM and Google use **superconducting** qubits (most qubits, fast, but error-prone); IonQ and Quantinuum use **trapped ions** (longer-lived, fewer errors, harder to scale); Microsoft is chasing an exotic "topological" qubit whose 2025 claim is disputed. The central obstacle is **error correction**: qubits are fragile, losing their state through **decoherence** in microseconds, and operations still fail often. That's why today's machines are called "noisy" and remain limited — and why a genuinely useful, fault-tolerant machine is, on most roadmaps, years away. ## Where finance is interested Banks see potential in portfolio optimization, risk/Monte Carlo simulation, derivatives pricing and fraud detection. JPMorgan has an active research group (publishing option-pricing and certified-randomness results); Goldman Sachs ran a quantum Monte Carlo proof-of-concept with QC Ware and IonQ in 2021. But these are **experiments** — as of 2026, no major bank runs quantum hardware in production. Consultancies are bullish long-term (McKinsey projects $400–600bn of value for finance by 2035; BCG $450–850bn across industries by 2040) — but those are wide projections, not measured results, and we flag them as such. ## The real risk: cryptography The sharpest concern is security. Much of banking, the internet and crypto wallets rely on public-key encryption — **RSA** and **elliptic-curve** — whose safety rests on math that's hard for classical computers. In 1994, Peter Shor showed a powerful quantum computer could crack exactly those problems: **Shor's algorithm** would, in principle, break today's standard encryption. No machine can do this yet (estimates run to millions of error-corrected qubits, though recent papers suggest fewer). The nearer worry is **"harvest now, decrypt later"** — adversaries copying encrypted data today to crack once the hardware exists, a risk [the Federal Reserve has analyzed](https://www.federalreserve.gov/econres/feds/harvest-now-decrypt-later-examining-post-quantum-cryptography-and-the-data-privacy-risks-for-distributed-ledger-networks.htm) for ledger networks. The response is **post-quantum cryptography** — new algorithms believed resistant to quantum attack. In August 2024, [NIST finalized its first three standards](https://www.nist.gov/news-events/news/2024/08/nist-releases-first-3-finalized-post-quantum-encryption-standards) (with a fourth added in 2025), and is urging organizations to begin migrating off RSA and elliptic-curve cryptography over the coming decade. ## The reality check Most experts think a "cryptographically relevant" quantum computer is years to a decade-plus away, with no consensus — a widely cited Global Risk Institute survey puts the odds at roughly even by about 2035. Boursel has noted that several flashy quantum claims were challenged soon after publication. The takeaways: investors should separate durable engineering progress from **benchmark theater**; and institutions' actionable step isn't buying a quantum computer but **inventorying their cryptography and planning the migration** to post-quantum standards — work that can start now, whenever the hardware arrives. ## Sources - [What is quantum computing?](https://www.ibm.com/think/topics/quantum-computing) - [NIST releases first 3 finalized post-quantum encryption standards](https://www.nist.gov/news-events/news/2024/08/nist-releases-first-3-finalized-post-quantum-encryption-standards)