The subject matter discloses a method and a system for securely distributing a credential and encryption keys for physical devices. The system comprises a security server and a physical device. the physical device comprises a memory module configured to store a share of the credential, a communication module configured to exchange signals, and a processing module configured to execute calculations upon request received on a wireless manner via the communication module from the security server, the calculations are transmitted to the security server to execute a multi-party computation process. The multi-party computation process outputs two shares of the credential, a first share is stored in the physical device. The physical device does not have access to the credential.