El Salvador will redistribute its Bitcoin reserves across multiple new addresses to mitigate potential quantum computing threats, the country's National Bitcoin Office announced on X. The cryptocurrency holdings, currently stored in a single address, will be divided into wallets containing up to 500 Bitcoin each, worth approximately $54mn per wallet according to exchange rates cited by Reuters.

According to 36Crypto, El Salvador's total Bitcoin reserves valued at $682mn will be split across 14 separate wallets for enhanced security. A public dashboard will maintain transparency by displaying the full balance across all addresses.

"Quantum computers have the theoretical capability to break public-private key cryptography using Shor's algorithm," the National Bitcoin Office explained in its X post, noting that this cryptography underpins not only Bitcoin but also banking, email, and communications systems. The office warned that when Bitcoin transactions are broadcast, public keys become visible on the blockchain, potentially exposing addresses to quantum attacks that could discover private keys.

The move follows warnings from investment giant BlackRock in May about quantum technology potentially undermining the cryptographic algorithms supporting prized digital assets.

Quantum computing researcher Project Eleven estimates roughly 6 million bitcoin could be vulnerable to quantum machines because of exposed public keys, the Independent reported.

But some industry figures have downplayed these concerns. MicroStrategy's Michael Saylor, whose company holds 629,000 bitcoins, suggested to CNBC that software upgrades could address quantum threats.

El Salvador's Bitcoin strategy, championed by President Nayib Bukele, has attracted scrutiny from the International Monetary Fund (IMF), which initially required the country to reduce cryptocurrency purchases. However, the IMF clarified in July that continued Bitcoin accumulation remains consistent with El Salvador's Extended Fund Facility (EFF) programme requirements.

This proactive security measure demonstrates El Salvador's commitment to protecting its pioneering digital asset reserves amid evolving technological threats, though the quantum computing timeline and Bitcoin's adaptive capabilities remain subjects of ongoing debate.