What is Binance Coin? Is it halal?

What is Binance Coin? Is it halal? Featured Image

10 min read




Mohammed Ayaaz Adam

Binance Coin (ticker: BNB) is the cryptocurrency issued by the popular Binance cryptocurrency exchange.

BNB is one of the biggest cryptocurrencies in the world issued by the largest cryptocurrency exchange in the world: Binance. BNB is the native cryptocurrency behind the BNB chain ecosystem and runs natively on the Binance cryptocurrency exchanges and the Binance chain.

BNB holds considerable market dominance as the fourth most popular cryptocurrency in the world and is closely tied to Binance’s platform.

Most scholars hold BNB to be halal, we also share this view.

Continue reading for a deep dive into Binance coin.

What is Binance Coin (BNB)?

Cryptocurrency exchanges were created in a similar spirit to stock exchanges, to allow people to buy and sell assets. Several crypto exchanges have now been established, with Binance and Coinbase being juggernauts in the industry.

Crypto exchanges aim to make it as easy as possible for people to sign up and exchange crypto assets. Along the way, some exchanges create their own cryptocurrency to be completely compatible with the exchange’s ecosystem.

In addition to being fully compatible and native, the cryptocurrency created by a particular company or exchange offers benefits such as reduced fees on the platform.

The Binance exchange was launched in mid-July of 2017. Binance wanted to launch a cryptocurrency that could be fully integrated within their ecosystem, and so 11 days before Binance exchange opened for trading they launched Binance Coin (BNB) through an Initial Coin Offering (ICO).

An ICO can be likened to an Initial Public Offering (IPO) whereby a private company lists itself on a stock exchange so that its shares can be traded by public retail investors. 

An ICO is a method through which projects can raise funds by offering coins to early supporters and enthusiasts. The company or team behind the cryptocurrency provides coins immediately or at some specified time in the future to public investors. The ICO allows the team to raise funds to progress their development of the cryptocurrency and its ecosystem.

Users that bought BNB coins at its ICO got early access to coins at low prices, though they were not entitled to anything else like a stake in the ecosystem.

Binance originally launched BNB as an ERC-20 token on the Ethereum blockchain which meant that it could be used seamlessly within the Ethereum ecosystem and be sent to ETH addresses. Binance then decided to migrate the BNB token to their own standard: BEP-2. They swapped all ERC-20 BNB coins with BEP-2 BNB coins at a 1:1 ratio.

Binance’s intention with Binance Coin and its BEP-2 standard is to have their own native cryptocurrency and blockchain that is fully integrated and entrenched within their ecosystem and works in sync with its exchange.

What does BNB do?

At the time of its launch in 2017, BNB’s major use case was as a utility token for discounted trading fees in the Binance exchange. Binance incentivises its users to buy and hold BNB and allow them to pay for their fees using BNB. This feature of BNB remains, whereby users that pay for fees using BNB receive up to 25% discount on fees. Users can also use BNB to pay for fees in the Binance Decentralised Exchange, as well as BNB’s blockchains.

Since 2017, Binance has dramatically expanded BNB’s use cases. A major use case of any cryptocurrency is to be able to buy things and spend your crypto since they are, after all, called ‘currency’.

Binance Launchpad allows developers and teams to launch their own cryptocurrency tokens. Users can buy and invest in these projects using BNB.

One of the most impressive use cases is Binance Card.

Binance Card is a VISA debit card issued by Binance that allows you to transact all over the world, both offline and online, using your cryptocurrency. Your card is linked to your cryptocurrency account, and when you spend money your BNB (or other select cryptocurrencies) are converted in real-time to allow you to pay with cryptocurrency just as you would with cash using a debit card.

Impressively, Binance Card offers cashback rewards of up to 4% if your monthly average balance hits 40 BNB.

Binance Pay is another offering from Binance where you can use BNB to pay select online stores and outlets. However, the amount of places that accept Binance Pay means it may not even be worth the hassle in setting it up.

Several popular blockchain based travel agencies, such as travala.com, accept BNB as a valid payment method. In addition to that, Travala’s own AVA token is a BEP-2 token, so it is connected to the overall Binance ecosystem.

An impressive use case of the Binance ecosystem is Binance Charity. The first non-profit organisation that delivers donations through cryptocurrency and allows donors to trace funds through transparent and permanent records on the blockchain. Users can donate their BNB to several causes the organisation is involved in.

From the above, you can see Binance is trying to open as many avenues and make as many partnerships as they can with their BNB coin. The more use cases a cryptocurrency has, the more it will attract customers who will then begin using it more often.

How does BNB work technically?


A cryptocurrency standard is like a set of rules that developers must adhere to if they want their token to be part of an ecosystem. The most popular standard is Ethereum’s ERC-20. ERC-20 is the basis for dozens of cryptocurrencies and allows full compatibility with the vast Ethereum ecosystem, from NFTs and games to shopping and metaverse.

The native token of the Binance chain is BNB, which means that when users want to transfer BEP-2 tokens within the ecosystem, it is necessary to hold some BNB. This provides huge incentives for people to hold and use BNB because they need it to interact with one of the biggest cryptocurrency ecosystems in the world.

An advantage BEP-2 tokens have, as part of one of the most popular ecosystems, is being compatible with numerous wallets.

BNB burning

Binance has been ‘burning’ BNB coins regularly on a quarterly basis since 2017. They spend some of their revenue to buy BNB and essentially delete them from the chain.

It may seem wasteful at first, but Binance has the goal of halving the maximum supply of BNB to reach 100 million coins. This is to increase the scarcity of BNB and prevent its price from being inflated away.

What are the use cases of BNB?

Reduced fees in the Binance ecosystem

A major use case of BNB is that it provides its users with a special discount on trading fees on the popular Binance cryptocurrency exchange.

Fees normally sit at around 0.1% on each transaction. Users who use BNB to pay these fees can save exorbitant amounts of money, especially if they trade regularly or trade large sums.

Consumer spending

Binance has been trying to expand the concrete uses of BNB to appeal to more retail consumers. It is no surprise then that some of the advantages of using BNB flouted by the marketing team at Binance is its consumer and shopping aspect.

Binance have launched Binance Card and Binance Pay to allow people to transact in BNB like they would with their fiat currency.

Binance Card is a VISA debit card that enables you to spend your cryptocurrency sitting in your wallet just as you would spend the fiat currency sitting in your bank account. Binance has added extra incentives such as 4% cashback offers.

Binance Pay is an online solution where users can shop using BNB at select outlets. However, this solution isn’t widely accepted and is still in its infancy. You can expect Binance to try and make more deals with online outlets to accept Binance Pay.

Are people using BNB right now?

BNB has a daily transaction count of under 5 million.

In November 2021 BNB daily transactions reached a peak of around 15 million and has continued to fall as the market entered a bear market.

More than 800 merchants accept BNB as payment though it hasn’t hit mainstream yet and is still compatible with niche merchants. With an increasing market dominance, currently standing at 4.74%, BNB is being used more as time goes on.

What are the strengths and weaknesses of BNB?



  • Discounted trading fees: Users who pay their fees in the Binance ecosystem using BNB receive a special discount.
  • Increased use cases: Binance is working hard to incentivise users to use BNB in addition to its core uses. As one of the most influential cryptocurrency companies in the world, Binance has the ability to make deals and develop infrastructure. Binance is developing new features like GameFi, SocialFi, and a metaverse.
  • Influence and adoption: Because Binance is one of the biggest ecosystems in the world, BNB adoption is increasing. In addition to BNB burning, this means BNB’s price should continue to increase.



  • Centralised: Binance is a centralised for-profit company, so the entire Binance and BEP-2 ecosystem is at the mercy of the profit incentives of the company. If Binance were to clash with regulators as has happened in the past, this can affect the BNB you hold.
  • Binance holds the majority: Around 85% of BNB is held by Binance, and combined with the centralised issue above, this means the supply and direction of BNB itself is highly dependent on the direction Binance decides to go. This almost cancels out the spirit of cryptocurrencies in not being at the mercy of authorities.
  • Clashes with regulators: Binance have been under intense scrutiny from government and regulators and have been found to purposefully try to avoid regulations. 


Is BNB a good investment?

BNB is one of the largest cryptocurrencies in the world issued by the most popular cryptocurrency exchange in the world. BNB ranks 4th in the entire cryptocurrency space by market capitalisation. It has a market capitalisation of around $49 billion with a market dominance of 4.74%.

BNB is available on Binance as its native coin.

BNB has declined in price following the recent market downturn in 2022 just as other cryptocurrencies and assets have. It currently has a price of $304 after reaching highs of almost $700 in 2021.

Even though Binance has had issues with regulators, it seems to have taken the market by storm mainly due to the fact that it is issued by the biggest cryptocurrency exchange company in the world. 

BNB’s utility will continue to increase as Binance increases its use cases, making it a popular cryptocurrency to hold. As long as Binance and its ecosystem continues to hold its position in the cryptocurrency exchange space, BNB will be held and used by its users. In addition to BNB burning, this means many investors see BNB as a valuable part of their crypto portfolio.

Alternatives to BNB


Bitcoin (BTC)

The original cryptocurrency that started it all off probably makes a much better investment overall because of its 39% market dominance and its being synonymous with cryptocurrency.

Bitcoin has the advantage of having a limited supply of 21 million coins which gives it more scarcity. Bitcoin also has more acceptance for payments amongst businesses, with more than 2,000 US businesses accepting Bitcoin.

As a long-term investment, Bitcoin has the upper hand.

Ethereum (ETH)

A valid alternative to BNB is the network and cryptocurrency on whose technology it was originally based: Ethereum. Given how Ethereum is synonymous with the DeFi space with its 80% market DeFi dominance, Ethereum is the giant that offers much more ecosystem uses than BNB can overall.

BNB offers an ecosystem with NFTs and games, but Ethereum was not only the original smart contract, NFT, and cryptocurrency ecosystem, but has the largest market dominance in the DeFi space and the second largest market dominance in the entire cryptocurrency space.

Ethereum has a level of credentials, adoption, and respect that BNB is still trying to attain.

Is Binance Coin (BNB) halal?

Most scholars hold BNB to be halal. We also share this view. 

The essence of the debate on whether cryptocurrencies are halal comes down to whether they are ‘Māl’ as we have explained previously. Māl is something that can be acquired, whether it be an item or a service.

There are three stances on cryptocurrencies today:

  1. Cryptocurrency is not Māl, rather it is a speculative, non-Sharia-compliant investment.
  2. Cryptocurrency is a digital asset but not a currency.
  3. Cryptocurrency is a digital currency.

Proponents of view (1) argue that cryptocurrencies are not Sharia-compliant since they have no intrinsic value and are merely entries on a digital ledger.

Our view has always been that (1) does not seem right since cryptocurrencies have value as millions of people are willing to buy, hold, and trade them. They are just as real as fiat currency today which mostly exists in the spreadsheets of banks. Our monetary system became predominantly digital a while ago.

View (2) seems to be the most realistic view, as cryptocurrencies are a new and emerging technology that are yet to mature into fully fledged currencies used by economies at large. However, in practice, there is no real difference for casual users between (2) and (3) since they both consider trading cryptocurrencies to be permissible.

It is important to remember that Zakat will be due on cryptocurrencies you hold, and BNB is no exception. To find out about how to calculate this, please read our article on Zakat on crypto.


Binance has lofty aspirations for BNB and is trying to replace Ethereum as the number one crypto ecosystem. With its influence, reach, and market dominance there is a good chance that Binance can continue to propel BNB and increase its adoption.

Investors in BNB just need to keep an eye on Binance’s clashes with regulators and the position governments take on Binance. The only thing standing in the way of BNB is Binance.

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