The Securities and Exchange Board of India has drawn up an action plan and capacity-building measures to ensure the quantum readiness of its regulated systems, Chairman Tuhin Kanta Pandey said on Wednesday at the Global Fintech Fest.
The Sebi chief said the regulator was working on 'quantum safe computing' with 2028-2029 as the target operational date. He added that passwords used across the financial sector under current encryption standards could be at serious risk with advances in quantum computing.
"How do we prepare ourselves as an industry to go for a quantum safe cryptography based on an action plan that we discover, prepare and then act within the next two to four years," Pandey said during a discussion with Uday Kotak, founder, Kotak Mahindra Bank.
"The traditional cryptography that we do now, with which we make passwords, whether it is 128 encrypted or whatever, will break with quantum computing, Crypto-proof passwords are called post-quantum cryptography (PQC), or quantum key distribution (QKD). We will have to prepare for that.
"And gradually, in all the systems, we will have to look at where the passwords have been used. And then, we will have to replace them," he said.
Pandey noted that fintechs are testing blockchain applications in the securities market within Sebi's innovation sandbox.
On artificial intelligence, he acknowledged both the vast opportunities and the need to address associated risks. He urged coordination with other regulators such as the Reserve Bank of India and Insurance Regulatory and Development Authority of India to ensure effective implementation.
"As we enter the next phase of this transformative journey, the collaboration between fintech innovations and regulatory foresight will determine not just how fast we grow, but how safely we grow," Pandey said. He also outlined measures to combat fraud and protect investors from scams and misleading actors in the market.
-- Khushboo Tiwari, Business Standard
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