How Liechtenstein could co-lead in building a global digital infrastructure for positive systemic change.
For weeks, Liechtenstein has occupied the world headlines as the leader of 80 nations in what is arguably the most high-profile UN reform initiative in years.
If approved by the UN General Assembly, the resolution mandates it to self-convene whenever one of the five permanent members of the UN Security Council exercises its veto. Though it does not change the veto holders’ power, it ensures a spotlight on the greatest obstacle to meaningful UN reform: the power of each veto holder to block any amendment of the UN Charter.
Liechtenstein Castle on the National Day held every year on August 15th
Many were surprised. Liechtenstein is a minuscule country of 30,000 people, squeezed between Switzerland and Austria, wrapped around a fairy tale castle.
Like the UK, it is a constitutional monarchy, ruled by its royal family since 1719. Since WW2, its main business has been to help rich EU individuals manage their wealth and reduce taxes. Not much of an incipit of a leader of positive global change.
But a radical change was initiated by Liechtenstein in 2008, when investigations and scandals following the financial crisis unearthed its role in helping individuals evade taxes.
Since then, under an increasingly visionary leadership, Liechtenstein started renewing its business model, raison d’etre, and image along three action lines, to become a positive catalyzing global actor.
First, by enacting bank transparency to hinder money laundering and tax fraud. Liechtenstein signed a deal with the EU in 2015 to curtail its bank secrecy and renew its standing as a member of the European Economic Area. It recentered its business model with great success towards high-quality wealth, financial, and estate professional services to wealthy persons and corporations.
Second, by redefining responsible and impact investments as those that truly tackle global challenges at the root and systemically. At a time when the leading industry metric for responsible investments, ESG, has lost all credibility as a measure of contribution to the UN Sustainable Development Goals (SDGs), its main private bank, LGT, created a new large dedicated impact fund, named Lightrock, in a declared juxtaposition to Blackrock, the largest investor in weapons and fossil fuels. Lightrock set out to redefine impact investment by setting out investing in “purpose-driven entrepreneurs seeking to solve global challenges”, in pursuit of “systemic change at scale”, also including tackling inequality which is viewed as a "major problem" by 75% of LGT clients.
Third, by fostering active neutrality and multilateralism for a stronger, fairer, more inclusive global governance that is able to protect peace and tackle global challenges. The mentioned UN veto initiative has unveiled Liechtenstein's unique potential to leverage its unique levels of independence, neutrality, and strategic autonomy, to push for strong multilateralism even in the face of some resistance from big powers.
Expanding on the same path
Liechtenstein could continue on the same path to become a catalyst for like-minded nations and wealthy individuals that also believe that tackling global challenges, requires stronger, fairer, more inclusive global governance and far reaching systemic approaches supported by an adequate media sphere - rather than the current failed dominant model based on a loose coordination of few powerful nations, and unelected ultra-billionaires and corporations, based on their narrow and short-term economic and political interests.
In pursuit of this opportunity, Liechtenstein could take inspiration from the initiative of another miniscule nation, Qatar, which leveraged its similarly unique strategic autonomy, and vision, to create a sweeping global digital media initiative via the hugely successful Al Jazeera, which has been playing for two decades a key role on countering the divisive role of propaganda on all sides, by in promoting the emergence of shared truths in the Middle East, and beyond.
Opportunity for the Government of Liechtenstein
Liechtenstein could pursue a similar initiative as Qatar with Al Jazeera, but in the field of global secure communications rather than global neutral information.
Liechtenstein could co-lead with a few like-minded nations the creation of a needed digital infrastructure for fair, secure and effective networking and dialogue - within and across nations, at all levels of society - free from the illegit spying, manipulation and bias of current platforms.
The lack of such a digital infrastructure, especially one that is secure and confidential enough, is a huge obstacle to nations’ ability to fairly and effectively promote global coordination and cooperation to solve problems and improve multilateral institutions.
For example, the Liechtenstein Ambassador to the UN stated that he had to postpone for two years the presentation of the resolution because “This is not the type of thing that we can do online”.
More concretely, the government of Liechtenstein could join an initiative for a new global IT security certifications body, and the creation of initial compliant IT systems that - while radically increasing its sovereignty over its digital communications - would create such global digital infrastructure, while ensuring international legitimate lawful access.
Such a digital infrastructure will enable nations and diplomats, companies and scientists, to discuss the economic, technological and governance structures that we need to steer away from global challenges and towards realizing our higher potential as a species.
It would enable the creation of a sort of an online World Democratic Systemic Forum - open 365 days a year, and complemented by in person meetings - where nations and civil society leaders can effectively enact the global cooperation and coordination needed to truly solve the global challenges.
How bad is the insecurity and manipulative bias of current IT systems?
Do we need new IT systems? Aren't the current ones good enough?
For classified communications, diplomats today rely on special classified client devices that are interoperable only with a few selected interlocutors within their country and alliances, usually provided or specified by an ally, whose security is largely a matter of blind faith, and often very hard to use.
For these reasons, on a day to day basis, for unclassified but sensitive communications diplomats are forced to rely on one of several non-interoperable “secure” messaging and email apps, like Signal, Threema, ProtonMail, WeChat, Telegram, WhatsApp, running on more or less “secured” iPhone or Android. These solutions are not only non-interoperable, but leave them highly exposed to being hacked at scale in their data or metadata confidentiality through flaws in the apps or server-side services, or directly via hacking of their devices by innumerable attackers.
Many others are in the same situation. Not only diplomats, but even prime ministers, elected officials, journalists, activists and top businessmen are hacked on their smartphones all the time.
As we detail in a recent white paper by the Trustless Computing Association, the number of law-abiding iPhone users who are hacked or hackable - continuously and undetectably - is not merely thousands but hundreds of thousands or millions, without counting their close associates.
Even the private market is well aware of the problem. There is a huge demand in private banking. Recent polls by UBS and by Northern Trust found that cybersecurity is the n.1 concern of UHNWIs and family offices worldwide, which accrue $50 trillion in assets. The more their success, the bigger the problem becomes. Nothing money can buy.
So, the most sensitive members of society are unable to communicate one-to-one securely and privately, let alone have access to a digital platform that can build upon adequate security to enable a fair, confidential and effective dialogue among them.
Furthermore, civil society, diplomats, elected officials, journalists and active citizens network on social media platforms, that are divided by geopolitical blocks, and subject to targeted manipulations - even more that ordinary citizens are - by powerful state and non-state entities at huge scale. A deluge of propaganda on both sides, no combination of platforms or sources enable sincere educated persons, with different backgrounds, to agree on a shared base of truths to start seeking common ground.
A post-Cold War Crypto AG?
Such an infrastructure can be conceptualised as the historical continuation of Crypto AG, the Swiss company that became the de-facto global standard and state-of-the art for sensitive and diplomatic digital communications during the Cold War.
For many decades, Crypto AG client and server devices were relied on for the most sensitive internal and diplomatic communications by over 120 nations until.
After many years of doubts, it was revealed on February 13th 2020 that it had been owned by and controlled by the US and Germany, and the US alone from 1994 until 2018, via a holding company based in, of all places, Liechtenstein.
It was arguably the most successful spy operation of the Cold War, which likely played a key role in ensuring that a better hegemonic superpower prevailed over a substantially worse one.
Such new digital infrastructure would constitute a sort of “post-Cold War version of Crypto AG”, the one that the West should have built after the fall of the Berlin Wall, to lay the foundation of a just, fair and democratic world order after the demise of the Soviet Union.
As opposed to the original one, it will be based on open democratic multilateralism, uncompromising transparency, and an ultra-resilient procedural front-door instead of a technical back-door.
Beyond diplomats, it’ll be available to all law-abiding organizations and persons and their associates, with utmost portability and convenience, via 2mm-thin standalone devices, carried inside custom leather wallets or in the back of their future smartphones.
The Crypto AG experience provided critical validation that such an infrastructure can be created. It proved that IT can be made ultra-secure, resisting even the most powerful attackers, at relatively moderate R&D costs. It proved, as crucially, that 3rd-party access to encrypted data and communications - solely for such ultra-secure IT systems - can be reliably restricted to intended parties under agreed conditions; contradicting widely shared ideas about the impossibility in all cases of a secure-enough "front-door.”
The original Crypto AG model would be changed so that both the security levels of its IT and their “front-door” mechanisms are specified and certified not surreptitiously by two intelligence agencies, but in a transparent, democratic, international, and multilateral way, to radically mitigate its potential abuse both by users to commit crimes, and by nations for illegitimate spying.
The hidden role of two nations would be replaced by a new resilient international democratic IT security certification body for human communications, operating across more neutral countries and within existing national and international laws.
Such body and techs would not need to rely on new untested magic technology but just enact time-proven, battle-tested and novel extreme socio-technical safeguards - down to the hardware fabrication - to ensure both ultra-high levels of user security and privacy and the resilience of a procedural in-person "front-door" mechanism - involving highly resilient and representative international judges and "citizen-jury like" processes to authorize legit access to distributed multi-national hosting rooms.
Opportunity for LGT Private Bank
Opportunities arise also for LGT Private Bank, which could uniquely offer its UHNWIS and family offices clients ultra-secure 2mm-thin mobile client devices that are compliant to such a certification body.
Such devices are carried in custom leather wallets (for iPhone and Android users) or embedded in the back of their next flagship smartphones (for Android users), to bring them radically unprecedented levels of confidentiality and integrity of communications and transactions, and engage in uniquely free and democratic social networking; while preventing abuse of such confidentiality to commit major money laundering or tax crimes.
While being a stand-alone personal computer, such a 2mm-thin device seamlessly integrates with and complements the user’s smartphone phone for Internet connection, data transfers, and bi-directional multi-factor HW-based authentication.
In the '90s, some banks gained a unique competitive advantage by being the first in providing their clients with the client-side transaction integrity that the market was not providing, via HW-based one-time-password tokens.
Similarly, in the '2020s a few private banks will provide their clients with an HW device to fill a huge market gap in the integrity and confidentiality of transactions and communications - with the relationship manager and with their own associates - and more widely for the private digital life with dozens of third-party apps.
Scuh offering could substantially increase client retention and relationship depth with existing clients, especially top and law-abiding, increase acquisition of new UHNW and high-margin clients, and enable it to offer some services that are not offered today due to the insecurity of current IT.
Opportunity for Lightrock
Lightrock could not only invest but lead in using such a system to enable nations and diplomats, companies and scientists, to discuss the economic, technological, and governance structures that we need to steer away from global challenges and towards realizing our higher potential as species.
Lightrock could lead a community of enlightened investors through dedicated fora as a sort of World Democratic Systemic Forum, 365 days a year, where nations and civil society leaders can effectively enact the global cooperation and coordination, and multilateral institutions and treaties, that are needed to truly solve the global challenges.
Enabling the like-minded ultra-wealthy to communicate in radically more secure and confidential ways with other global stakeholders - to freely speak their mind in confidentiality, off-the-record and pseudonymous ways -Lightrock and LGT could turn such a new platform in the online and offline, and social network, of choice for leading the global conversation for positive systemic change.
Will powerful nations accept or join such a body
Sure, security agencies of powerful western nations - that frankly shoulder the responsibility to protect the entire west and liberal democracies - would surely initially object to agreeing to bind themselves to ask permission to an international multilateral governance body, if they conclude they need to intercept a Danish journalist, a French parliamentarian or a Liechtenstein businessman.
Yet, after many years of discussions with them, many improvements to its governance model and socio-technical mechanisms, and many meetings in private and in public through 8 editions of the Free and Safe in Cyberspace conference series - at the Trustless Computing Association - we feel have a solid case for nations large and small that their participation as governance partners of such a body would not only be decisively in the general interest of their government, democratic system and citizenry, but even in their own narrower national security and public safety mission.
In the end, Liechtenstein has once again an opportunity to play an important role in history by shifting the World towards large-scale global positive systemic change.