Cryptocurrency companies are taking measures to ensure their wallets and custodial services are protected against future risks. The threat from quantum computing lies in the need to upgrade user-facing infrastructure faster than blockchains can change their core protocols.
This shift reflects a growing belief that network-level upgrades to blockchains Bitcoin and Ethereum may take years to complete, during which wallets will remain exposed. Moreover, the so-called “Q-day” threat to cryptocurrencies may arrive sooner than expected, with a recent estimate suggesting... as early as 2030.
One of the companies dedicated to bringing post-quantum security to crypto wallets is Silence Laboratories, which says it has added support for distributed (or multi-party computation, MPC) signatures using ML-DSA, a cryptographic algorithm selected by the National Institute of Standards and Technology (NIST).
Jay Prakash, CEO and co-founder of Silence Laboratories, said the company’s work stays current with the latest developments in post-quantum cryptography, including NIST’s …endorsement of three algorithms: SPHINCS+, Falcon, and CRYSTALS-Dilithium.
Prakash said the company has been evaluating these algorithms for distributed signature systems used by custodians and institutional wallets over the past six months.
Prakash said: "Not all of SPHINCS+, Falcon, and CRYSTALS-Dilithium meet the standards for MPC-friendliness—that is, whether they support efficient distributed transaction signing—and potential fragmentation must also be considered, as each chain has chosen a different scheme with its own optimization criteria, signature sizes, or computational efficiency."
He added that the keys were generated in a shared manner on isolated nodes, signatures are jointly generated, and the keys are never reconstructed. This helps defend against the threat of quantum computers, which are estimated to be able to break current cryptography within a few years. Prakash added that enterprises also understand this need.
He said, "Today, institutions have begun adopting distributed signatures. Whether it's partners like BitGo or banks building digital asset businesses, they understand that keys cannot be centralized in one place."
The MPC system distributes private keys across multiple devices—this is the standard configuration for custodial institutions and institutional wallets. Silence Laboratories states that its solution is designed to be compatible with existing architectures, allowing enterprises to upgrade without altering how their systems operate.
Prakash said: "Any bank or custodian with existing MPC infrastructure can now migrate to a post-quantum MPC-based wallet without changing their infrastructure. It’s just a code upgrade. After the upgrade, they have a post-quantum secure signing layer."
This upgrade occurs at the wallet level, meaning users do not need to take any action.
Prakash said: "With the post-quantum wallet SDK, institutions can easily upgrade their existing infrastructure without requiring large-scale architectural migrations—they’re already using MPC. Developers can upgrade the algorithms in the library, and end users—whether they’re using wallets like MetaMask or any other wallet—will experience the same interface and now benefit from post-quantum security."
This divergence reflects a broader disagreement within the cryptocurrency industry on how to address quantum risks. Some developers focus on upgrading wallets, while others believe that only protocol-level changes to the cryptographic networks themselves can provide comprehensive user protection.
Other companies are taking different approaches to solve this problem. The developers behind the wallet are working on it. Postquant Labs is building a system that adds quantum-resistant signatures on top of Bitcoin using a separate smart contract layer, avoiding changes to the underlying protocol.
Similar ideas have been proposed, including one by Avihu Mordechai Levy, a researcher at Star Wars, suggesting the replacement of Bitcoin’s elliptic curve cryptography with hash-based signatures, operating within the existing network rules. This design has been described as a “last resort” rather than a scalable solution, and may come with very high costs.
However, the real challenge lies in timing. While no quantum computer currently exists that can break existing cryptography, recent advancements have prompted experts to pay closer attention to its development timeline. This uncertainty is driving companies to act sooner rather than later, but investing solely in wallet size is far from sufficient.
Prakash added, "If the wallet upgrades to the post-quantum era but the blockchain does not, it won't work."