El Salvador’s Bitcoin office has announced that it redistrubuted nearly $678 million worth of its BTC holdings into multiple addresses. The move is in response to growing concerns about the potential threat posed by quantum computing to digital assets.
El Salvador Moves to Secure Bitcoin Reserve
In a recent X post by the country’s Bitcoin Office, El Salvador revealed it shifted its entire 6,274 Bitcoin reserve into 14 new wallets. The transfers were each capped at 500 BTC.
Previously, all holdings were stored in a single address. This setup left the nation’s assets more exposed to evolving cryptographic risks. Through a new public dashboard, officials highlighted that diversifying wallets preserves transparency while reducing the potential impact of a quantum-based breach.
“The reserve is being redistributed into multiple addresses, each holding up to 500 BTC. Limiting funds in each address reduces exposure to quantum threats because an unused Bitcoin address with hashed public keys remains protected. Once funds are spent from an address, its public keys are revealed and vulnerable. By splitting funds into smaller amounts, the impact of a potential quantum attack is minimized,” they shared.
Quantum computers, in theory, could use algorithms like Shor’s to crack public-private key encryption. In the case of Bitcoin, once a transaction is broadcast, the public key becomes visible. This provides attackers with an opportunity to exploit vulnerabilities before they are confirmed. These transfers help the country significantly reduce this risk.
Security experts highlight that splitting state reserves often goes hand in hand with multi-signature protections, hardware key segregation, and role-based access controls. These measures reduce the likelihood of single-point failures and enhance resilience in the event of cyber or technological disruptions.
The security move comes after El Salvador announced a $1.6 billion infrastructure deal with Turkey’s Yilport Holdings to develop two ports near the planned Bitcoin City.
El Salvador Builds on Broader Bitcoin Strategy
The move also comes as the country intensifies its broader Bitcoin agenda. Last month, El Salvador entered a partnership with Pakistan to explore public sector use cases for cryptocurrencies. This signaled the government’s intention to expand its influence in the global digital finance sector.
The country has been making strategic moves despite scrutiny from the International Monetary Fund (IMF). Back in February, the government reported that it had halted Bitcoin purchases. Yet, its BTC holdings have increased in some capacity.
For context, President Nayib Bukele noted that the country’s portfolio has surged in value despite the pressure from the IMF loan. El Savaldow recorded a 124% gain to reach $644 million.
Other governments watching El Salvador could follow suit by adopting similar custody practices. Clear custody frameworks and strong security measures can minimize political and financial friction when integrating digital assets into public finance.
Michael Adeleke
Michael Adeleke is a passionate crypto journalist known for breaking down complex blockchain concepts and market trends into clear, engaging narratives. He specializes in delivering timely news and sharp market analysis that keeps crypto enthusiasts informed and ahead of the curve. With an engineering background and a degree from the University of Ibadan, Michael brings analytical depth and precision to every piece he writes.
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Source: https://coingape.com/el-salvador-splits-678m-bitcoin-holdings-in-bid-to-mitigate-quantum-threats/