Coinbase is designing a custody system meant to protect roughly $250 billion in institutional assets no matter which post-quantum signature scheme Bitcoin or another blockchain eventually adopts. Chief Cryptographer Yehuda Lindell said the exchange is preparing for several possible outcomes rather than betting on one candidate, since hash-based signatures may not work with the multi-party computation systems many custodians rely on today.
Coinbase builds for several signature outcomes at once
Coinbase Chief Cryptographer Yehuda Lindell told MARA Foundation TV that the exchange wants its custody platform to keep working regardless of which post-quantum signature scheme blockchains eventually choose. Bitcoin has not selected a scheme for practical post-quantum use, and Lindell said different blockchain communities may land on different standards instead of a shared one.
That leaves Coinbase preparing for several outcomes rather than rebuilding around a single candidate. The stakes are high: Coinbase holds about $250 billion in assets for institutional customers, including clients such as BlackRock, which uses Coinbase Custody for its digital-asset products. A separate August review placed Coinbase's institutional assets at approximately $376 billion and said the company safeguards more than 80% of assets held by U.S. spot Bitcoin and Ethereum ETFs.
Hash-based signatures strain existing MPC custody
Many institutional custody platforms split control of a private key across several parties using Multi-Party Computation, or MPC, so no single party ever holds the complete key. Lindell said many post-quantum signature schemes may not work well with MPC because their math differs from signatures blockchains use today, and hash-based signatures are a particular problem since they lack the arithmetic structure that key-splitting depends on.
Researchers, including Stanford cryptographer Dan Boneh, are studying ways to apply MPC-style controls to hash-based signatures, though Lindell said the work remains highly experimental. Coinbase's January-established quantum advisory board, which includes Boneh, Lindell, Ethereum Foundation researcher Justin Drake and others, is tasked with tracking these developments. In June, BitGo tested a quantum-safe MPC signing protocol built on the ML-DSA standard with Silence Laboratories.
Hardware modules offer a fallback path
To reduce reliance on MPC compatibility, Coinbase is exploring a backup design using programmable Hardware Security Modules, where encrypted keys would be assembled only inside the protected device. According to Lindell: "I will be able to say, I can support any scheme", though he gave no completion date for the work.
Bitcoin currently relies on elliptic-curve cryptography, and no publicly demonstrated quantum computer can yet derive its private keys. Still, Coinbase's advisory board estimated in June that about 1.7 million BTC sit in older, exposed address formats, with address reuse potentially placing up to 5 million BTC at future risk. Draft proposals BIP 360 and BIP 361 would address parts of a migration, but neither has been activated.
Source: crypto.news
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