World Anti-Counterfeiting Day: Focus on Digital Sovereignty

As part of SICPA’s year‑long World Anti‑Counterfeiting Day series, this article continues to explore how illicit trade undermines trust, public revenues, and public safety. Previous articles focused on physical counterfeiting and supply‑chain risks. Today, the threat is rapidly evolving. 

Those same illicit practices are now moving into the digital world. Identity, documents, platforms, and data can be forged or manipulated at scale, often in seconds. Illicit trade no longer operates only in physical markets, it increasingly exploits digital ecosystems, where trust is easier to abuse and harder to verify. 

This article therefore focuses on digital sovereignty: the ability of nations to protect identity, information, and value in a world where authenticity can no longer be taken for granted. 

In a world that has been transformed by digitalisation, the concept of national sovereignty can no longer be based on physical borders or traditional governance models. Nations now operate in a hybrid reality where the physical and digital realms are intertwined, which is reshaping the way countries protect their interests, govern their economies, and serve their citizens. 

With 68% of the global population now online; more than one billion new users in just five years; digital identity systems, e-payments and secure data ecosystems have become the global norm, offering new opportunities but also exposing critical vulnerabilities. Rising geopolitical instability and growing cyber risks highlight the fragility of outdated infrastructure, unmonitored data flows, illicit digital economies and emerging threats such as revenue leakage and welfare fraud. As data security becomes central to national resilience and digital money moves in the shadows, citizens are increasingly demanding transparency and inclusive digital services. 

The traditional conception of sovereignty is therefore no longer sufficient. The digital age requires a new model, one that can protect data integrity, reduce economic leakages, strengthen accountable governance, and deliver responsible, secure and inclusive public services for the future.

Generative AI and the new era of document fraud 

Generative artificial intelligence has fundamentally transformed the threat landscape for document fraud. Today, highly realistic counterfeit documents can be created in minutes using widely accessible AI tools, without specialised skills or professional software. These AI‑generated documents increasingly bypass traditional visual inspections and automated verification systems, making them difficult to distinguish from authentic records. 

As a result, conventional verification methods are no longer sufficient. The challenge has shifted decisively from detecting fraud after the fact to securing authenticity at the source. In this environment, digital sovereignty has become essential: organisations must retain control over how documents are issued, protected, and verified in order to preserve trust in an AI‑driven world. 

The scale of the threat is already substantial. In the first quarter of 2025 alone, deepfake‑related fraud losses reached USD 200 million globally ¹. Between May 2024 and April 2025, an estimated 38,000 scam websites were created every day worldwide, while AI‑powered identity fraud losses are projected to reach USD 40 billion by 2027. These figures illustrate how rapidly AI‑enabled fraud is industrialising across sectors and borders. 

Sovereignty depends on verifiable information 

At its core, digital sovereignty is the ability to trust information. For more than a century, SICPA has protected physical sovereign assets by ensuring authenticity, origin, integrity, and traceability. These same foundational principles must now be applied to digital assets. 

True digital sovereignty requires the ability to: 

• know where information originates, 
• verify whether it has been altered, 
• understand how and where it circulates, 
• and prove its legitimacy at any point in time. 
   

Through its Digital R&I activities, SICPA is already applying these principles to real‑world digital use cases. This includes CERTUS‑based solutions securing official documents such as diplomas and credit record certificates, most notably through a project with the Canton of Jura. But this also includes a suite of proprietary techniques of advanced data watermarking and AI integrity technologies designed to secure sensitive information, certify machine learning models, and detect unauthorised data use. Whether in digital or physical form, we ensure authenticity and traceability so we can deliver unmatched protection against document leaks by enabling organizations to tag and track sensitive files with secure and unique identifiers. 

In parallel, SICPA is advancing Verifiable Credentials initiatives, where issued attributes are cryptographically protected and independently verifiable, with projects underway in collaboration with organisations such as IATA and the U.S. Department of Homeland Security. 

How can governments govern effectively in the digital economy? 

As identity and information become trustworthy, governments can begin to reassert control over increasingly complex digital ecosystems. Yet before focusing on specific sectors, it is essential to acknowledge the rise of a much broader phenomenon: the online shadow market. This opaque and fast‑expanding space includes counterfeit goods, illegal e‑commerce, online scams and phishing networks, and a wide range of illicit digital services. Operating outside formal oversight, these ecosystems siphon traffic, exploit users, and erode the integrity of lawful digital markets, often doing so in real time, at a speed that challenges traditional enforcement models. 

Illegal online gambling is one prominent example within this wider shadow economy. In the United States alone, such platforms generate an estimated USD 53.9 billion in annual revenue, directly competing with licensed operators and undermining regulated markets. Similar patterns appear across streaming, e‑commerce, and other digital sectors, where rogue platforms divert revenue, users, and trust away from legitimate ecosystems. 

These activities have significant fiscal consequences. Illicit trade and tax evasion thrive in digital shadows where financial flows are fragmented, opaque, and difficult to trace. Without timely, real‑time, reliable data, governments are forced into reactive response, weakening enforcement, revenue collection, and policymaking. 

Key challenges: illicit activity and weakened fiscal oversight 

Governments face a set of structural barriers to effective digital governance: 

• The shadow economy distorts markets and harms legitimate businesses, 
• Digital money flows lack sufficient control and traceability, 
• Limited visibility restricts liquidity management and access to national assets, 
• The absence of real‑time data weakens policymaking and enforcement. 

Restoring control, visibility, and trust 

To govern effectively, governments need real‑time intelligence and actionable oversight across digital ecosystems. 

SICPA Detect® enables authorities to identify illegal digital platforms, including gambling, streaming, and counterfeit e‑commerce and to take decisive action. Governments can either recover lost traffic and revenue by redirecting users toward official, regulated channels, or directly disrupt criminal and shadow‑economy activity at its source. 

In parallel, SICPA’s CBDC solutions support secure, sovereign digital money ecosystems. Built on a modular, scalable platform, they enable instant settlements while meeting high performance and security requirements. The CBDC Cockpit provides real‑time monitoring of assets in circulation, empowering authorities to measure impacts, adapt monetary policy, and safeguard financial stability. 

Together, these capabilities help governments restore control over digital flows, strengthen policymaking with real‑time data, and enable trust and adoption by citizens and institutions, while fully respecting sovereign requirements. 

How can governments deliver responsible public services? 

With trusted identity and effective governance in place, governments can deliver public services securely and at scale. During the pandemic, hundreds of billions of dollars were lost worldwide through emergency benefit distribution, exposing structural weaknesses in welfare systems. Outside crisis periods, audits by national authorities and international organisations consistently show that a share of social‑protection spending is lost to fraud and serious abuse, with higher exposure in fully digital programmes lacking strong identity and eligibility controls. This challenge is magnified by scale: social benefits represent trillions of dollars in public spending each year. 

Once funds are disbursed, recovery is extremely limited. For example, in fiscal year 2022, the U.S. Department of Justice recovered approximately USD 2.7 billion through False Claims Act cases³, compared with GAO estimates of USD 233–521 billion in annual fraud losses⁴, meaning recoveries accounted for around 1% or less of estimated losses. Even small error or fraud rates therefore translate into major fiscal impacts. This reality is driving governments worldwide to move from reactive enforcement to preventive approaches, prioritising verifiable identity, entitlement validation, and data integrity at the source. 

Key challenges: fiscal responsibility, trust, and inclusion 

Governments face growing and sometimes competing expectations: 

• Funding national budgets without increasing taxes, 
• Delivering digital services that balance convenience with strong privacy protection, 
• Measuring the real‑world impact of welfare policies in near real time, 
• Reducing access barriers to ensure inclusivity and broad service reach. 
   

SICPA Guardian® supports governments and public leaders in building more efficient, transparent, and sustainable welfare systems. Through real‑time monitoring and verifiable data controls, governments can protect taxpayer funds, strengthen citizen trust, and improve cost efficiency, while ensuring that public services remain inclusive, accountable, and impactful. 
 

SICPA helps nations build resilient, responsive, and responsible digital infrastructures that empower both governments and citizens. In an environment shaped by AI, digital platforms, and cross‑border data flows, sovereignty is no longer theoretical - it must be designed into systems from the start. 

Through the SICPA Digital Sovereignty Platform, governments gain the means to govern with confidence: detecting fraud, securing tax collection, enabling sovereign monetary systems, and creating compliant new revenue streams. At the same time, the platform strengthens the citizen experience through transparency, trust, and data‑driven decision‑making, all built on a secure, interoperable foundation that protects data, identity, and critical systems. 

Every nation’s digital ecosystem is unique, shaped by its laws, priorities, and strategy. When information is verifiable, its origin known, its integrity preserved, and its legitimacy provable, authorities can act effectively, protect lawful markets, and assert digital sovereignty with confidence. 

At SICPA, this vision is captured in a simple principle: 
One Nation, One Signature.