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21st of January 2018

Economy



Bitcoin fever grips Amitabh Bachchan: Big B's wealth rose from $250,000 to $17.5 million in 2.5 years | Latest News & Updates at Daily News & Analysis

At a time when the cryptocurrency mania is making headlines across the world, it seems like Bollywood's shenshah, Amitabh Bachchan also cannot stop himself to be a part of the party. 

With Bitcoin breaking its own records everyday, the value of a stock investment by the Bachchan family has risen from $250,000 to staggering $17.5 million in just two and a half years.

Amitabh Bachchan along with his son Abhishek Bachchan in 2015, had invested in $250,000, as part of their personal investment, in Meridian Tech Pte, a Singapore firm founded by Venkata Srinivas Meenavalli. 

But last week, Meridian's prime asset Ziddu-.com was acquired by another Meenavalli-backed overseas company LongFin Corp just two days after the latter's listing on NASDAQ. 

When Bachchans had invested in Meridian, though the transaction happened under RBI authorised liberalised remittance scheme, Ziddu was a "cloud storage and e-distribution startup". 

In December 2017, Ziddu-.com described itself as "a Blockchain technology empowered solutions provider" that offers microfinance using "crypto currencies across continents." 

And now because of the words, 'blockchain' and 'cryptocurrencies', about which the world is getting crazy already, that madness lead to the LongFin stock rose more than 1,000 per cent last week.  

"In lieu of their holding in Meridian Tech, Bachchans received 250,000 shares of LongFin following the asset purchase," the Economic Times quoted Meenavalli as sayinng. At Monday's LongFin stock price of $70 a share, Bachchans' holding in LongFin is valued at $17.5 million (which at the current exchange rate is approximately Rs 114 crore).

Cryptocurrencies, including Bitcoin, are virtual money, which don’t have any physical backing like other currencies. If you want to buy something through Bitcoin, you have to just transfer a code to the seller’s wallet account online. Each coin can be further split to ease transactions. Bitcoin has a payment network which is managed through a closed group of computer network. Those backing it claim it is transparent and all Bitcoin transactions can be monitored any time by anyone.

The only hitch: You can’t find the owner’s identity. It’s decentralised and is not tied to a bank or government and allows users to spend money anonymously. The records of the Bitcoin transactions are stored on thousands of computers across the globe. The price of Bitcoin depends on demand and supply of users. The financial industry worldwide is reeling under the pressure of the cryptocurrencies and blockchain technologies. The crypto asset class is led by bitcoin, which first went online in 2009.

These cryptocurrencies are popular due to their inherent nature of decentralisation and transparency. Cryptocurrencies can be held, traded, transferred without the need of a central authority and the entire transactions are stored in decentralised public ledger.

The financial industry worldwide is reeling under the pressure of the cryptocurrencies and blockchain technologies. The crypto asset class is led by bitcoin, which first went online in 2009.

These cryptocurrencies are popular due to their inherent nature of decentralisation and transparency. Cryptocurrencies can be held, traded, transferred without the need of a central authority and the entire transactions are stored in decentralised public ledger.

Will banks authorised it as a legal tender? 

The way Bitcoin is gaining popularity, the Central Banks worldwide will soon join the chorus as banks are already feeling the pinch as the fintech industry is inroading the money remittance and lending markets with innovative blockchain based solutions. IMF MD Christine Lagarde has warned banks and financial institutions should adjust to the impact of cryptocurrencies.

Cryptocurrency in India:

However, the Reserve Bank of India is uncomfortable with "non-fiat" cryptocurrencies like Bitcoin. The fiat cryptocurrency is a digital currency which will be issued by the Reserve Bank of India (RBI) in place of the physical one at present, he said, adding that the central bank is studying this aspect at present.

The RBI has been repeatedly cautioning everyone about the usage of cryptocurrencies, flagging a slew of concerns.

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