About Minka

What How Why

Minka is an open network for publishing money.

The network aims to connect the world's balances through the web using shared, connected ledgers. This makes the incredibly complex process of moving balances simple, fast & secure.

We have improved the way people interact with money in Colombia and are now building an open network to scale the benefits around the world.

Challenge

Almost every company, fintech or otherwise, needs to move balances in real time. Balances are everywhere. Everybody transacts. But not all balances are created equal, not all are written in the same language.

Each payment and clearing system speaks its own dialect of money, and expresses transactions in a different language. That is why it is so difficult to get different systems to talk to each other and coordinate changes in real time.

Why it is so hard to make money flow between all those different payment pipelines, and why moving balances between disparate ledgers is so expensive and slow?

Money does not flow.

Money, or it’s representation as a balance or an IOU, should be free to go where it's needed. The historical development of the existing financial infrastructure, however, means that this rarely happens.

Balances are therefore stuck:

• In specific formats. For example as cash, credit balances or wallet currencies, each with little or no interoperability
• In independent systems. For example, in standalone bank accounts, digital wallets, ERP software or other financial silos that are not integrated

This means that the very utility of money is compromised, with organizations and people unable to keep or move balances where they're needed.

What's wrong with the current banking infrastructure?

The current financial system has evolved in a disjointed and piece-meal way over the last 50 years. Monetary networks, banks and other financial institutions were created to work independently, with limited means to exchange money securely and efficiently.

As a result, there are around 2,000 separate payment networks globally, with only 3% of them being interoperable. Across these networks the complexity grows with the existence of hundreds of thousands of separate financial ledgers including those of banks, fintechs, credit unions, stored value wallets or ERPs, most of which are independent from each other. This silo-like, layered approach fails to match the demands for a more open, inclusive financial environment. It's also highly limited in its ability to scale to accommodate future requirements.

Over the period, a number of advances in financial technology have gradually allowed money to flow more easily. The introduction of ATMs, the development of ACHs and wire transfers, electronic wallets, mobile money transfer and API-based services are all steps that helped, particularly in the developed world. But such measures have done little to update the closed loops of networks that make up the existing financial system.

The advancements also fail to cater to the needs of large portions of the population, where numbers of those excluded from the financial system are still high.

This issue is magnified in the lower-income developing countries, where unstable financial environments and heightened political distrust mean that people still prefer to use cash day-to-day, even though it has a number of disadvantages.

As another consequence, the banks and financial institutions responsible for the systems have had to focus their energies on managing the old infrastructure and competing with an increasing number of modern Fintech challengers, instead of creating a better alternative.

What's wrong with cash?

Cash is still a fundamental aspect of the global economy, with the demand actually growing in many parts of the world. It's trusted, anonymous, free to use and readily available.

But there are also a number of downsides to a reliance on cash as a means of value exchange, which include:

• The inability for people to move it cheaply, quickly and safely from one place to another, for example, when sending money to someone who lives on the other side of the city or the world
• The inability for people to move beyond subsistence living because of lack of visibility to the financial system or limited access to credit and expertise that could help them to manage finances better
• The continual threat of currency devaluation, especially in the developing world, which leads to insecurity and distrust in fiat money
• A reliance on a cash-based and old infrastructure means that building of financial services is slow and expensive

What about blockchain technology?

Blockchain technology, such as Bitcoin, provided an opportunity to free up the movement of money, but this has yet to be fully realized. It's the most secure and reliable monetary network and over the years has evolved to be an excellent, high frequency store of value, but, because of its limited transactional throughput, a low frequency medium of exchange.

Alternative blockchain networks do not guarantee immutability due to the limited network size, governance and unproven security model alternative to proof of work. Building on those networks will not resolve the problem of final settlement that bitcoin offers and will not resolve the issue of last mile connectivity.

Our belief is that most monies are simply information about debts (IOUs) and all banking is a swap of IOUs. We are building a logically and physically distributed network inspired and based on blockchain technology. We see ourselves as a clearing network for the Web built on top of the settlement network for the Internet (bitcoin).

Solution

Minka is reinventing the base layer of the financial infrastructure to change this.

One way to solve this problem is to connect different ledgers using a sort of a bridge that acts as a translator between different ledger languages and interfaces. Another approach is to create a common language to represent balances and transactions in the same abstract way, and then get all participants to adopt the same conventions to express money and encode the instructions to move it around.

Minka Ledger takes the latter approach and aims to provide a common language for expressing money and balances so that companies can talk to each other about moving funds using a ledger-as-a-service in the cloud or hosted on-premise.

We believe that money needs to flow effortlessly and quickly to where it's needed. But to allow for this the foundation of the financial infrastructure needs upgrading.

We have built a seamless, open infrastructure on the cloud that enables organizations to develop fast, modern, low cost financial solutions in days instead of years.

On our open network, balances can move instantly and securely between systems and accounts, improving the way people interact with money.

This infrastructure and the financial services that follow help money to flow by:

• Managing balances in the cloud
• Defining flows on how balances should move
• Exchange balances

These features create some key advantages, including:

• A transfer of balances that are available immediately and cleared instantly
• A secure and auditable infrastructure on top of a public blockchain
• The creation of an open banking protocol that integrates in days, so no need for service providers to focus on infrastructure
• Programmable, flexible rules for any type of money flow
• No need for reconciliation between ledgers that are on the network

It enables any organization connected to the network to collect, distribute and exchange money using a simple, API-based payments protocol.

It also means that an almost unlimited number of solutions can be created to help with the movement and better use of balances, including:

• Automated clearing houses
• Mobile wallets
• Loyalty programs
• Local currencies
• Central bank digital currency

We have already done this in Latin America, where we built the regions fastest growing real time payment systems TransfiYa, and have ambitions to expand the concept globally.