The Centre for Development of Advanced Computing (C-DAC) is working on quantum key distribution (QKD) technology that could be used to provide highly secure communication for bank-to-bank transactions. C-DAC Scientist Deepu CV shared this information while speaking to ANI on the sidelines of the Global Fintech Fest (GFF) 2026 in Mumbai.
Quantum Key Distribution for Banks
Deepu said C-DAC has taken up several projects in the field of quantum technology, including quantum key distribution. According to him, QKD could become an important technology for securing communication and transactions between banks in the future. C-DAC has also developed a quantum key distribution sandbox to demonstrate how quantum-secure transactions could take place between two banks.
How the Technology Works
Explaining the system, Deepu said a quantum key can be generated at one bank and shared with another bank. The key can then be used to secure communication between the two banks, with encryption provided at both ends. The technology is designed to help protect communication from attempts to intercept the encryption key.
What Is Quantum Key Distribution?
Quantum key distribution is a technology based on the principles of quantum mechanics. It allows two parties to establish encryption keys using quantum properties.
One of the key features of QKD is that an attempt to intercept the quantum key can potentially be detected. This makes the technology relevant for sectors such as banking and financial services, where secure communication is extremely important.
C-DAC as a Technology Provider
Deepu said C-DAC primarily works as a research and technology provider rather than directly operating consumer payment systems such as the Unified Payments Interface (UPI).
C-DAC develops technologies through research and development and can transfer these technologies to industry for deployment and commercial use. This process is known as transfer of technology, or TOT.
Challenges in Adopting the Technology
Deepu said the technology is still at an early stage and faces several challenges. The limited number of players working in this field and the high security requirements of banking transactions are among the challenges that need to be addressed.
As quantum technologies continue to develop, their use in financial services could provide new approaches to securing communication and sensitive financial information.
C-DAC and the Financial Sector
C-DAC operates under the Ministry of Electronics and Information Technology and works in areas such as high-performance computing and advanced digital technologies.
Deepu also said the participation of banks, non-banking financial companies and other financial-sector organisations at the Global Fintech Fest could create opportunities for technology transfer, industry interaction and feedback on emerging technologies.
