Binance Coin Beyond Trading Discounts: Real-World Use Cases for Payments and Loans

Binance Coin (BNB) is best known as the native token of the Binance cryptocurrency exchange. Holding BNB provides discounted trading fees on Binance and access to Initial Exchange Offerings (IEOs) on the platform's Launchpad. However, Binance Coin has evolved to have several use cases beyond simply getting trading discounts on Binance.

BNB can now be used for payments, loans, travel bookings, and more. The wider acceptance and real-world utility of BNB is key to its long-term success and valuation. Here are some of the top use cases for Binance Coin beyond getting trading discounts on the Binance exchange.

Payments

One of the most significant use cases for BNB is for making payments and purchases. An increasing number of merchants and service providers now accept BNB as a payment method.

For example, the leading travel booking site Travala.com accepts BNB as a payment option for hotel bookings. Users can pay for over 2 million hotels worldwide using BNB tokens. The adoption by Travala is a huge boost for BNB's utility as a payments coin.

Several other online and offline retailers also allow customers to pay using BNB. These include companies like Crypto Emporium, Bidali, and AutoCoinCars. The ability to easily spend BNB on real products gives it an advantage over cryptos that are just used for speculation.

BNB-Pegged Stablecoins

Another important payments use case is the launch of stablecoins pegged to the price of BNB. In 2020, Binance introduced BUSD and BGBP, stablecoins pegged to the US Dollar and British Pound.

The BUSD and BGBP stablecoins run on the Binance blockchain and allow users to benefit from BNB without worrying about volatility. They provide a convenient way to make payments and transfers denominated in fiat while taking advantage of fast settlement times and low fees. The stablecoins expand the usability of BNB for everyday transactions and commerce.

Lending and Borrowing

BNB also now has a growing role in decentralized finance (DeFi) applications, particularly lending and borrowing.

On platforms like Venus, users can lend out their BNB to earn interest or use BNB as collateral to take out a loan in a stablecoin or other asset. DeFi lending expands the utility of BNB in the crypto economy and gives users a way to earn yields on their holdings.

According to Binance, as of early 2022 over $5 billion worth of assets were being supplied by lenders on Venus, with BNB among the most supplied assets. The integration of BNB with DeFi protocols greatly increases its functionality in crypto finance.

Virtual Goods and Gaming

BNB is also slowly gaining adoption in blockchain-based games and virtual worlds. The popular blockchain game Axie Infinity uses BNB for in-game payments. Users can purchase non-fungible token (NFT) assets and pay fees on Axie Infinity using BNB.

As more games and metaverse platforms develop on blockchain, BNB has the potential to become a common payment currency in these virtual environments due to its low cost and fast transaction time. The future possibilities around gaming and metaverse integration make BNB an intriguing long-term bet on the growth of digital worlds.

Gift Cards and Vouchers

In 2021, Binance launched its own gift card platform allowing users to buy gift cards for a variety of services including Amazon, Uber, and Hotels.com. The gift cards can be purchased directly using BNB, providing another easy way for holders to spend their coins.

The platform has grown quickly, reaching over $1 billion in total sales in 2022. The gift card use case makes BNB more “liquid” in the everyday economy and expands options for avoiding volatility when spending crypto.

"BNB’s evolution from a humble trading coin to a widely used crypto with multiple real-world applications has been exciting to watch. As more people start using digital assets in their daily lives, coins like BNB with broad utility have an advantage over narrowly-focused projects."

• Dan Roberts, Crypto Commentator

Should You Buy Items Direct With BNB or Convert to Fiat First?

When paying for goods and services with BNB, users have two options - pay directly in BNB or convert to fiat currency first. What's the better approach? Here are some pros and cons to consider:

Pay Directly in BNB

• Avoid exchange fees for converting to fiat
• Faster payment than going through conversion process
• Supports merchant adoption of crypto payments

Convert to Fiat First

• Avoid volatility risk between transaction and payment clearing
• May have tax implications vs capital gains treatment of direct BNB payment
• Requires exchange account with conversion ability

Overall, paying directly with BNB maximizes speed, convenience and cost. But converting to fiat first helps mitigate volatility risk and may have fewer tax implications. Situational factors like merchant acceptance policies, payment size, timing needs, and exchange access will impact the ideal approach.

How Does BNB's Use for Loans Compare to Taking Collateralized Loans in Fiat?

Decentralized lending platforms allow users to take out crypto-collateralized loans in assets like stablecoins. But how does this compare to traditional collateralized lending in fiat currency? There are some key differences:

Fiat Collateralized Loans

• Require lengthy loan application process
• Need traditional assets like real estate for collateral
• Loan disbursement can take weeks after approval
• Interest rates set by centralized institutions

BNB Collateralized DeFi Loans

• Very fast loan origination using smart contracts
• BNB provides collateral asset
• Loan receipt can happen in minutes or less
• Interest rates driven algorithmically by supply/demand

DeFi lending with BNB collateral provides a quicker, more convenient loan option compared to traditional fiat loans. However, fiat loans offer fixed interest rates and may allow bigger loan amounts. The best option depends on specific borrowing needs.

Conclusion

While Binance Coin is still strongly associated with providing discounts on the Binance exchange, it has developed into much more than just a trading perk. Real-world use cases for payments, lending, gaming, travel and more demonstrate BNB's evolution into a multifunctional crypto asset. As these applications continue to grow, they will strengthen BNB's staying power and value in the broader blockchain ecosystem.