QKD in 2025: Innovations, Challenges, and the Path to Adoption

April 2025

IoT & Emerging Technology

Michelle Joynson

Research Analyst

In the past five years, AI and IoT technologies have rapidly reshaped industries and entire economies, driving digital transformation and streamlining essential processes. But as data volumes soar and cyber threats escalate, the risks to data privacy and security have become a pressing concern. In response, tech giants and governments are ramping up investments in cutting-edge quantum security solutions, with Quantum Key Distribution (QKD) at the forefront of this new era of protection..

QKD leverages the unique principles of quantum mechanics to encrypt data, offering a level of security so advanced it’s considered virtually impossible to hack. The QKD market is advancing at a rapid pace, with exciting breakthroughs and innovations already making waves in the first quarter of this year:

• Multiplexing - In March 2025, Toshiba and KDDI Research demonstrated QKD technology for multiplexing, in what is considered a world first. Multiplexing allows QKD and data signals to share existing fibre optic networks, cutting down both the cost and complexity of deploying a dedicated QKD infrastructure. By assigning secret keys to the C-band and high-volume data to the O-Band, this solution makes it possible to transmit both over a single optical fibre - in this case, at an impressive 33.4 Tbps over 80 km, delivering stronger security and improved usability.. 
• Continuous-variable QKD - In March 2025, QKD company LuxQuanta released the second generation of its NOVA LQ Continuous-variable QKD (CV-QKD) system. CV-QKD systems are QKD systems that encode quantum information using properties of light. The upgraded system extends the range to 100 km and 20 db; more than double the earlier version’s capability. In addition, the new system is built as a plug and play system, allowing for easy integration with existing infrastructure and ensuring a more cost-effective solution.
• Quantum-secure Space Communications - In January 2025, the European Space Agency (ESA) and the European Commission confirmed their cooperation on the European Quantum Communication Infrastructure (EuroQCI). The EuroQCI will be an advanced network that will leverage QKD to protect Europe’s vital infrastructure, using a combination of both fibre optics and satellites. The ESA will lead the development of a satellite constellation that will enable the network to be vastly expanded across Europe. The use of satellite communications will enable the network to be vastly extended. 

Despite these exciting innovations, challenges like low key rates, distance limitations, and high costs still hinder the widespread adoption of QKD technology. Nevertheless, we forecast a significant surge in adoption, with the number of businesses using QKD services set to grow from just over 1,000 in 2025 to 3,000 by 2030; representing an impressive 151% growth. This rapid expansion underscores the growing interest in QKD, even as it’s still in its early stages.

Global Number of Businesses Adopting Quantum Key Distribution Services

Source: Juniper Research

To seize the momentum in QKD service adoption, vendors need to act decisively across several strategic fronts:

Develop hybrid solutions:

QKD offers near-unbreakable encryption, but it lacks built-in authorisation and authentication, meaning organisations still rely on traditional methods; leaving room for cyber attacks. To close this gap, vendors should combine QKD with Post-Quantum Cryptography (PQC), creating a hybrid solution that blends quantum-secure key distribution with robust authentication. PQC uses advanced mathematical algorithms to protect against both classical and quantum threats.

However, it's worth noting that PQC’s resistance to quantum attacks isn’t mathematically proven in the same way QKD protocols are. That’s why a hybrid approach is key; but also complex. Successfully integrating these two technologies will require specialised expertise, whether developed in-house, sourced from research institutions, or secured through strategic partnerships with PQC providers.

Target industry giants:

Early adopters of QKD include major players in finance, government, and telecoms - think JP Morgan Chase, BT, and HSBC. These organisations are not only investing in quantum tech but also helping to shape its future. To tap into these opportunities, QKD vendors must continuously push innovation and offer niche capabilities - like advanced multiplexing - that set them apart. Collaborating closely with these industry leaders can unlock essential resources and accelerate development.

Accelerate quantum repeater development:

One of the biggest roadblocks to scaling QKD is the absence of quantum repeaters. Unlike classical systems, where repeaters copy and boost signals over long distances, quantum repeaters operate differently and are much harder to develop. Though they've shown promise in lab environments, real-world deployment remains elusive due to high costs and technical hurdles. Still, they are critical to expanding QKD to match the reach of today’s classical networks.

To make this leap, QKD vendors need to forge alliances with research institutions, tech giants, and even rival vendors to drive innovation and make this foundational technology a reality.

While Juniper Research forecasts commercial quantum computers are still 10–15 years away, the rising threat of cyber attacks is prompting enterprises to act now. To capitalise on this urgency, QKD vendors must form strategic partnerships, continue innovating, and deliver comprehensive solutions that meet the growing demand for quantum-secure communication.

As a Research Analyst within Juniper Research's IoT & Emerging Technology team, Michelle provides insight and analysis on the latest developments in nascent, fast-growing technology markets. Her latest reports include Private Cellular Networks, Quantum Key Distribution, and IoT Cybersecurity.