Binance USD (BUSD)

Payments and Transactions

Binance USD is a stablecoin pegged 1:1 to the U.S. dollar, used for digital payments on blockchains. It allows users to send and receive funds internationally with fast verification on the public blockchain.

Trading and Exchange

It is widely used on Binance and over 30 other exchanges for trading against cryptocurrencies like Bitcoin, Ether, and altcoins. Binance USD supports over 300 trading pairs and can be easily converted to and from USD without fees.

Staking and Yield Farming

Users can stake Binance USD to earn token rewards. It is also used in decentralized finance (DeFi) protocols such as Venus, Aave, and yearn.finance to earn yield through lending and liquidity provision.

Stability and Liquidity

Binance USD maintains price stability by being fully backed by U.S. dollar reserves held by Paxos. It offers a reliable store of value and liquidity, making it useful for hedging against crypto price fluctuations.

Cross-Chain Use

Binance USD is issued on multiple blockchains including Ethereum, BNB Smart Chain, Avalanche, Polygon, Tron, and Optimism, allowing flexible use across different blockchain networks.

Pros

• Binance USD offers fee-free trading on Bitcoin and Ethereum pairs against USD and stablecoins, which can save money on trades.
• It supports a wide variety of cryptocurrencies, with over 140 digital assets available for trading.
• The platform has an intuitive user interface and useful charts, making it easier for users to trade.
• Crypto deposits are free, and the minimum deposit is low, starting at $10.
• Binance USD provides advanced trading features and staking options for earning rewards.
• It allows users to trade with familiar Binance-style tools and offers a large number of trading pairs (150+).
• The platform supports crypto domains, simplifying transfers by replacing complex wallet addresses with custom domain names.

Cons

• USD deposits and withdrawals are currently suspended, so users cannot deposit or withdraw U.S. dollars until further notice.
• Withdrawal fees may apply for crypto withdrawals, and staking rewards have a service fee of 25% to 35%.
• Regulatory concerns and legal uncertainties exist, which could impact the platform's operations.
• Some fees apply to transactions, such as a 0.5% fee on instant buy/sell features.
• Verification is required before conducting any transactions, including deposits and withdrawals.
• Binance USD is not available in all U.S. states due to stricter cryptocurrency regulations in some areas.

Founders of Binance USD

Binance USD was created by Binance, a cryptocurrency exchange founded by Changpeng Zhao (known as CZ) and Yi He. Changpeng Zhao is the main founder and former CEO of Binance, while Yi He is a co-founder who has played a key role in the company's growth and strategy. Binance USD is a stablecoin issued by Paxos on behalf of Binance starting in 2019.

Investors in Binance USD

Binance USD has attracted a variety of investors, including institutional and angel investors. Specifically, Binance.US has 16 institutional investors and 1 angel investor. It has raised a total of $217 million from 23 investors, including notable names like Beacon Venture Capital, Calm Ventures, Circle Ventures (Boston), Flucas Ventures, Foundation Capital, Fundamental Labs, and RRE Ventures. In its latest funding round in April 2022, 9 investors participated, contributing $200 million.

Investors in Binance

Binance, the parent company, has raised over $2 billion across 5 funding rounds. Some of its key investors include Sequoia Capital, Fancheng Holdings, Limitlesscryptos, Big Candle Capital, BTX Capital, CRVN Capital, and Hard Yaka. These investors have supported Binance's growth since its founding in 2017.

Halal Status of Binance USD

• General Halal Consideration: Binance USD, as a stablecoin, is generally considered permissible (halal) in Islam when used as a medium of exchange or value storage, provided it is not involved in interest-bearing or speculative activities. Stablecoins like Binance USD are often backed by real-world assets, which aligns with Islamic finance principles emphasizing asset-backed transactions.

• Shariah Compliance Factors: For a crypto token to be halal, it must avoid riba (interest), gharar (excessive uncertainty), and involvement in haram (prohibited) industries. Binance USD itself, being a stablecoin, does not inherently involve these prohibited elements.

• Usage Matters: The halal status depends on how Binance USD is used. For example, earning yield through interest-based mechanisms on stablecoins is not halal, but holding or using Binance USD for permissible transactions is acceptable.

• Certification and Platforms: Binance has launched Shariah-compliant products (like Sharia Earn) for certain tokens, but Binance USD specifically is not mentioned as part of these certified staking products. However, stablecoins similar to Binance USD are generally accepted when used properly.

Answer: Yes, Binance USD can be halal when used as a stablecoin for permissible transactions and not for interest-bearing or speculative purposes.