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The era of quantum computing is about to begin, with profound implications for the global economy and the financial system. Rapid development of quantum computing brings both benefits and risks. Quantum computers can revolutionize industries and fields that require significant computing power, including modeling financial markets, designing new effective medicines and vaccines, and empowering artificial intelligence, as well as creating a new and secure way of communication (quantum Internet). But they would also crack many of the current encryption algorithms and threaten financial stability by compromising the security of mobile banking, e-commerce, fintech, digital currencies, and Internet information exchange. While the work on quantum-safe encryption is still in progress, financial institutions should take steps now to prepare for the cryptographic transition, by assessing future and retroactive risks from quantum computers, taking an inventory of their cryptographic algorithms (especially public keys), and building cryptographic agility to improve the overall cybersecurity resilience.

China, People's Republic of --- Quantum computing. --- Financial services industry --- Technological innovations. --- China, People's Republic of. --- Macroeconomics. --- Economics: General. --- International Economics. --- Computer Science. --- Emigration and Immigration. --- Industries: Financial Services. --- Innovation. --- Research and Development. --- Technological Change. --- Intellectual Property Rights: General. --- Technological Change: Choices and Consequences. --- Diffusion Processes. --- International Migration. --- Financial Institutions and Services: General. --- Economic & financial crises & disasters. --- Economics of specific sectors. --- Migration, immigration & emigration. --- Technology. --- general issues. --- Financial crises. --- Economic sectors. --- Migration. --- Population and demographics. --- Financial sector. --- Currency crises. --- Informal sector. --- Economics. --- Computer programming. --- Financial services industry. --- Computer programming --- Computer Science --- Computer science --- Currency crises --- Diffusion Processes --- Economic & financial crises & disasters --- Economic sectors --- Economics of specific sectors --- Economics --- Economics: General --- Emigration and Immigration --- Emigration and immigration --- Financial crises --- Financial Institutions and Services: General --- Financial sector --- General issues --- Industries: Financial Services --- Informal sector --- Innovation --- Intellectual Property Rights: General --- International Economics --- International Migration --- Macroeconomics --- Migration --- Migration, immigration & emigration --- Population and demographics --- Research and Development --- Technological Change --- Technological Change: Choices and Consequences --- Technology

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Whether in crypto assets or in CBDCs, design choices can make an important difference to the energy consumption of digital currencies. This paper establishes the main components and technological options that determine the energy profile of digital currencies. It draws on academic and industry estimates to compare digital currencies to each other and to existing payment systems and derives implications for the design of environmentally friendly CBDCs. For distributed ledger technologies, the key factors affecting energy consumption are the ability to control participation and the consensus algorithm. While crypto assets like Bitcoin are wasteful in terms of resources, other designs could be more energy efficient than existing payment systems.

Economics: General --- Macroeconomics --- Industries: Financial Services --- Finance: General --- Central Banks and Their Policies --- Energy: Government Policy --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Macroeconomics: Consumption --- Saving --- Wealth --- Economics of specific sectors --- Economic & financial crises & disasters --- Distributed ledgers --- Finance --- Computer applications in industry & technology --- Economic sectors --- Financial crises --- Virtual currencies --- Technology --- Blockchain and DLT --- Digital currencies --- Central Bank digital currencies --- Payment systems --- Financial markets --- Informal sector --- Economics --- Currency crises --- Financial services industry --- Technological innovations --- Blockchains --- Databases --- Clearinghouses --- Banking --- Consumption --- Uruguay

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This paper discusses the impact of the rapid adoption of artificial intelligence (AI) and machine learning (ML) in the financial sector. It highlights the benefits these technologies bring in terms of financial deepening and efficiency, while raising concerns about its potential in widening the digital divide between advanced and developing economies. The paper advances the discussion on the impact of this technology by distilling and categorizing the unique risks that it could pose to the integrity and stability of the financial system, policy challenges, and potential regulatory approaches. The evolving nature of this technology and its application in finance means that the full extent of its strengths and weaknesses is yet to be fully understood. Given the risk of unexpected pitfalls, countries will need to strengthen prudential oversight.

Artificial intelligence --- Banks --- Capital and Ownership Structure --- Computer security --- Cyber risk --- Depository Institutions --- Diffusion Processes --- Econometric and Statistical Methods: Special Topics: General --- Economic sectors --- Finance --- Finance: General --- Financial Institutions and Services: General --- Financial Institutions and Services: Government Policy and Regulation --- Financial Instruments --- Financial Risk and Risk Management --- Financial sector policy and analysis --- Financial sector stability --- Financial sector --- Financial services industry --- Financial services --- Financing Policy --- General Aggregative Models: Forecasting and Simulation --- General Financial Markets: Government Policy and Regulation --- Goodwill --- Industries: Financial Services --- Industries: Information Technololgy --- Information technology industries --- Information technology --- Innovation --- Institutional Investors --- Intellectual Property Rights: General --- Intelligence (AI) & Semantics --- Large Data Sets: Modeling and Analysis --- Machine learning --- Micro Finance Institutions --- Model Construction and Estimation --- Mortgages --- Non-bank Financial Institutions --- Online Safety & Privacy --- Pension Funds --- Research and Development --- Security measures --- Technological Change --- Technological Change: Choices and Consequences --- Technological innovations --- Technology --- Value of Firms --- Hong Kong Special Administrative Region, People's Republic of China