The Brazilian government is also working on developing an encrypted email service for private citizens.
It's a fully encrypted smartphone that aims to foil snooping governments, industry rivals and hackers.
It's also a sleek, attractive device that fits in your pocket and can impress friends and colleagues, according to its makers.
The Blackphone is set to be released next month by the secure communications firm Silent Circle and the small Spanish-based manufacturer Geeksphone, amid a fever pitch of concern over revelations about vast US surveillance of data and telephony.
But Silent Circle chief executive Mike Janke said his company was working on the handset even before last year's revelations about the wide-ranging US National Security Agency programs, leaked by former contractor Edward Snowden.
"We did this because there was a problem that was not being solved: secure communications," Janke told AFP in an interview in the Silent Circle offices overlooking the Potomac River just outside Washington.
Silent Circle was formed in 2011 and in 2013 launched apps and other services which allow smartphone and PC users to send encrypted messages and videos.
The Blackphone is an extension of that effort, says Janke, a former Navy SEAL who co-founded the firm with other ex-SEALs and Silicon Valley cryptographic experts.
"We offer completely encrypted, peer-to-peer communications. We have encrypted video, encrypted text and secure VoIP (Voice-over-Internet-Protocol) calls," Janke said.
The founders include Phil Zimmermann, who created the widely used PGP (Pretty Good Privacy) standard, and former Apple cryptographic expert Jon Callas.
Last year, Silent Circle halted its encrypted email service to avoid becoming a target after the US government subpoenaed the records of a similar service called Lavabit.
"We destroyed all that data," said Janke, while adding that the company never faced a subpoena.
Silent Circle customers include major global corporations, human rights activists and even the Tibetan government in exile.
Because of its work, he said, "almost all of the major smartphone manufacturers came to us" to collaborate on a more secure smartphone.
Janke said Silent Circle chose to form a joint venture for Blackphone with the small Spanish company which recently began making smartphones using the Firefox operating system.
The larger firms, said Janke, "want to own your soul. These companies are in the business of monetizing data."
Silent Circle developed a modified or "forked" version of Android called PrivatOS for the phone, which is set to be unveiled at Mobile World Congress in Barcelona on February 24.
'It's sexy, it's thin'
The company declined to release detailed specifications or pricing ahead of the unveiling, but Janke said it will be sold around the world at prices lower than the iPhone 5S or Samsung Galaxy S4.
But he maintained it would be comparable in terms of performance to those flagship devices. It is designed as a user-friendly phone that could be carried by executives, government officials, activists or ordinary people.
"It's sexy, it's thin, it's sleek, but it also solves a problem," Janke said.
"You can still go to Google and browse the web, but Google doesn't know who you are. It's a high-end smartphone. The user doesn't have to know how to use or how to spell encryption."
As an added assurance to customers, the Blackphone venture is incorporated in Switzerland with a Swiss data center and has "minimal data retention."
"All we have is the user name you give us and a 10-digit phone number," he said.