What is Binance Coin?

CRYPTOCURRENCY prices may be falling but one virtual coin is bucking the trend, Binance Coin.

The value of Binance Coin is up just over 2% over the past 24 hours and is currently worth $310 at the time of writing.

Cryptocurrencies have been crashing in recent weeks amid regulatory crackdowns.

Virtual currencies such as Bitcoin and Ethereum had hit record highs earlier this year after getting high profile backing from entrepreneurs such as Elon Musk as well as institutional interest from banks.

But the market is unregulated and pricing is volatile, with regulators such as UK City watchdog the Financial Conduct Authority warning that investors should be prepared to lose all their money.

It comes as investors have been trying to cash in on the next big cryptocurrency, which also adds risk and volatility to the market.

Binance Coin has become one of the largest cryptocurrencies.

It has a market capitalisation of $47.3 billion, making it the fourth largest cryptocurrency behind Bitcoin, Ethereum and Tether.

What is Binance Coin?

Binance Coin was launched in 2017.

It was set up by cryptocurrency exchange Binance, which is the world's largest crypto platform.

There are lots of crypto exchanges but levels of regulation differ and those operating in the UK must register with the FCA for anti-money laundering.

Binance Coin operates with the ticker BNB and can be purchased on the Binance exchange and on other platforms such as eToro.

5 risks of crypto investments

THE Financial Conduct Authority (FCA) has warned people about the risks of investing in cryptocurrencies.

  • Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements. 
  • Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.
  • Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market. 
  • Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.  
  • Marketing materials: Firms may overstate the returns of products or understate the risks involved.

The coin was initially launched for Binance users to get discounted trading fees.

But now it can be used to pay transaction fees on Binance and to pay for items on websites such as Crypto.com.

Supply and the price of Binance Coin is managed by the Binance exchange using one fifth of its profits each quarter to repurchase and destroy coins.

How much is a Binance Coin?

A Binance Coin is worth $310 as of Thursday July 15.

The price is up more than 2% over the past 24 hours and down just under 2%% during the past week.

That may not seem impressive but in contrast, Bitcoin's price has fallen just over 3% in the past day and Ethereum is down 4%.

Bitcoin and Ethereum values have fallen by nearly 3% and nearly 12% over the past week, according to Coinmarketcap.

How has Binance Coin been affected by the UK Binance ban?

The FCA has banned Binance from regulated activity in the UK.

Brits can still buy and trade coins on the platform but some banks such as Barclays have been blocking transfers and there have been issues with withdrawals.

This doesn't seem to have hit the Binance Coin price though as the platform and coin operates across the world.

It does underline how risky cryptocurrency is though as it can be hard to get your money out, especially if your bank will not work with a platform.

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From Dogecoin and Litecoin to Bitcoin – here are the different cryptocurrencies explained.

Mastercard will allow payments in cryptocurrencies like Bitcoin later this year.

Meanwhile, Chancellor Rishi Sunak is setting up a taskforce to explore the option of launching a UK digital currency dubbed "Britcoin".

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