Japanese Companies Demo Unforgeable Quantum Tokens

In November, the technology took a step forward when Mitsui, NEC, and Quantinuum announced they had successfully delivered and redeemed quantum tokens over a 10-kilometer fiber-optic network in Tokyo using off-the-shelf equipment—an industry first. The quantum tokens were delivered using a new exchange protocol that employs an emerging technology called quantum key distribution (QKD).

QKD Is Theoretically Unbreakable

QKD is, in theory at least, an unbreakable method for sharing a cryptographic key between two parties that can then be used to encrypt and decrypt private messages. The technology is currently being tested by financial institutions, government entities, major technology firms and militaries.

QKD exploits the quantum properties of photons—specifically, that measuring characteristics like polarization alters their quantum state. Photons used in QKD are typically generated by specialized hardware, such as lasers. Jefferson Florez, the senior photonics engineer at Quantinuum, says that by using polarizing filters, QKD transmits these photons between two parties as a sequence of randomly selected single photons, each representing a bit.

Only a subset of the photons is chosen to form the key, and each bit can only be accurately read with the correct filter. A third party can’t determine which filters are used, so data thieves cannot copy the photon bits without changing their states and alerting the users in the process. This security scheme is underpinned by the no-cloning theorem, which states it is impossible to copy unknown and arbitrary quantum states.

Using a bank and a customer as an example, Duncan Jones, the head of cyber at Quantinuum, which holds the intellectual property behind the quantum token protocol, describes a use case for quantum tokens. Upon receiving a quantum token from the bank, a customer, in order to redeem its value at a branch of his choosing, sends a message to the bank using standard means. The encrypted message includes the name of the branch and his digital token data, to which he adds a random bit to make the communication unreadable by the bank, though it can still be identified and verified. The bank then sends a copy of the communication to all its branches.

“When the customer presents his token data to the designated branch, it is validated locally with no need of cross-checking,” says Jones. “The token can only be used once and cannot be redeemed at another branch.”

A quantum key distribution test involved two QKD units representing a bank and a customer, and allowed the customer to redeem the quantum token for a financial transaction at the bank branch of their chosing.Quantinuum

Another use case involves commodity-backed quantum tokens, where a token represents a tangible asset such as a precious metal. Because quantum tokens are unforgeable, double-spending them is impossible. This gives the issuing central authority surety and users the benefits of fast trading in privacy and with local validation.

“There is no known non-quantum solution that can provide unforgeability, local validation, and privacy at the same time,” says Jones. “Different approaches can achieve any two of the three, but you cannot achieve three at the same time. This is what makes quantum tokens special.”

The idea of quantum tokens to represent money goes back to the 1970s, says Stephanie Wehner, a professor of quantum information at Delft University of Technology in the Netherlands. “With this trial in Japan, the researchers are claiming to make use of arbitrary quantum states that could be used create tokens to represent money and which are fundamentally impossible to copy,” she says. But given the lack of any detailed technical documents, “it’s difficult to comment on the veracity of the claims,” she adds. “If verified, such a use case employing existing hardware would be important to realize.”

Testing the Unforgeable Tokens in Action

While Quantinuum provided the quantum token protocol for the November trial, NEC put together the platform to test the technology. The set-up consisted of two modified QKD units, one representing a bank, the other a customer. Each unit comprised a photon transceiver and a digital processing unit, and the devices were hooked together via 10 km of dedicated optical fiber. Each digital processor was coupled to an application server that in turn linked to an ethernet-based intranet. That intranet connected the bank and customer to each other and also to two computers representing the bank branches.

Based on the quantum token protocol, the bank’s QKD photon transceiver sent a sequence of random quantum photons to the customer’s transceiver, where they were used to create a quantum token. The token was converted into digital data and then randomized together with the designated branch information and sent back to the bank, which relayed the information to the branches. Only the designated branch accepted the token for redemption.

A standard quantum key transaction is typically transmitted by a QKD device at a few hundred kilobits per second. But the protocol for quantum tokens is far more complex and requires speeds of around 1 gigabit per second to make transactions practical, says Naoto Ishii, the director of the Quantum Cryptography System Research Group at NEC. Engineers also had to modify the QKD devices to work with the protocol, which proved a challenge, he says.

Mitsui’s part in the trial took on the role of project manager. “We are developing a business in the field of digital trading,” says Koji Naniwada, a deputy general manager at Mitsui. “So the security and immediacy of quantum tokens are attractive for us.”

Looking ahead, Ishii’s group is working to extend the length of optical fiber that quantum tokens can be transmitted, which could stretch to 50 km before the quantum data becomes unstable. Other targets include speeding up the transmission and reception of the tokens, and the development of a QKD device that does not require dedicated optical fiber for the quantum channel.

Besides financial applications, NEC sees quantum tokens being used for cryptographic communications by large companies and government agencies. So, as a business, NEC is considering providing both the platform for the technology and quantum token application services.

“Although some customization of the platform will be necessary to suit the application, we believe the technology is basically complete and ready for commercial use now,” says Ishii.