The Binance exchange is relatively young, but thanks to active marketing and numerous promotional campaigns, it has already become one of the most recognizable platforms for trading cryptocurrencies. The description below shows what Binance’s offer looks like and helps to assess who it may be a good choice for.
What is Binance and what are the main features of its offer?
The Binance platform was launched in 2017, and its founder is a Chinese computer scientist and businessman, Changpeng Zhao, valued in the world of cryptocurrencies. Initially, the headquarters of the stock exchange were located in Shanghai, then in Hong Kong, then in Malta, and now in the Cayman Islands.
Here are the most important features of Binance and the parameters of its offer:
- the ability to trade cryptocurrencies as well as contracts and options on crypto,
- exchange involving stablecoins,
- round-the-clock customer service (including in Polish),
- Binance app,
- own stablecoin binance USD (BUSD) and the Binance coin token (BNB), which allows, among others, to reduce transaction commissions,
- Binance Visa payment card,
- the need to verify your identity when creating an account.
Binance – Commissions and fees
These are the main features of the Binance exchange and the parameters of its investment account. The Binance exchange does not charge a fee for setting up and maintaining an account or for storing cryptocurrencies on it. In this case, the main cost is transaction commissions, which are calculated on the value of the transaction and vary depending on the investor’s trading volume – the higher it is, the lower the commission rates.
Importantly, at Binance, the amount of commission charged is also influenced by: activity on the investment account and the type of order (maker/taker) under which the transaction is executed.
Investors with a higher trading volume are promoted in the case of maker orders, i.e. those that support liquidity and are executed under certain conditions (e.g. after the cryptocurrency price drops to a specified level). Taker orders, which involve buying or selling crypto immediately at the current price, do not provide such benefits.
Another way to reduce commissions is to use the exchange’s tokens: binance coin (BNB). Their operation will be discussed further in the analysis.
Other costs at Binance – fiat and crypto deposit and withdrawal
The second most important type of fees on cryptocurrency exchanges are commissions for depositing and withdrawing traditional and digital currencies. As for the latter, Binance does not charge any additional costs for crypto transfers – there are only fees that apply on the network of a given cryptocurrency.
For deposits and withdrawals of dollars, euros, or other fiats, the amount of the fee depends on the currency and payment method. Payments in the form of a transfer are usually free of charge, and the use of a payment card is associated with a commission calculated as a percentage of the transaction value. The issue of withdrawals is similar, but it is worth noting that there are fewer currencies in which they can be made (m.in withdrawals in PLN are not possible).
Taxes and PIT settlement
When trading cryptocurrencies on the Binance exchange, as with other stock market investments, the investor is required to account for his operations and possibly pay 19% capital gains tax.
Binance does not send users any tax form, but it does provide a history of crypto sales and purchases, as well as a history of deposits and withdrawals. Another advantage is that according to the current regulations, the tax obligation arises only when cryptoassets are exchanged for fiat currency. This means that as long as only crypto-crypto transactions are carried out, you do not have to submit the PIT-38 form and settle accounts with the tax authorities.
List of cryptocurrencies and other instruments
An important aspect of the offer of each cryptocurrency exchange is the wealth of financial instruments offered. There are about 400 cryptocurrencies and tokens on the Binance platform, including all key stablecoins (BUSD, USDT or USDC), plus dozens of futures contracts and options for the most important cryptoassets, m.in. bitcoin, ethereum, litecoin and dogecoin.
A list of cryptocurrencies, leveraged instruments and other services available on the exchange can be found on the Binance.com website in the “trade” and “derivatives” tabs. At this point, it is only worth adding that it is possible to trade cryptocurrencies in crypto-crypto pairs, as well as crypto-fiat pairs (there are no pairs involving the Polish zloty). This means that individual cryptocurrencies are valued in other major cryptocurrencies, such as bitcoin, ethereum or tether, as well as in traditional currencies: USD, EUR, GBP or AUD.
What is Binance Coin and what is it useful for?
There are other features and tools available on Binance that may be of interest to beginners and advanced cryptocurrency enthusiasts. This is mainly about various solutions that allow you to obtain additional benefits from the use of cryptocurrencies.
It is worth starting with the fact that the exchange has its own two digital currencies: the dollar stablecoin binance USD (BUSD) and the binance coin token (BNB). The stablecoin mimics the value of the dollar in a 1:1 ratio and facilitates trading on the platform, while creating its main market (it is the most promoted and largest next to BTC and USDT in terms of the number of cryptocurrencies). BNB, on the other hand, are utility tokens that are primarily used to reduce exchange fees. By keeping them in their account, clients receive a discount on trading commissions.
Trading on the exchange is possible both through the browser and through the Binance app. The functionality of the latter is practically the same as the browser version.
Visa payment card and other elements of the offer
In addition, the exchange offers the Binance Visa payment card, the functionality of which does not differ much from classic debit cards with a multi-currency function. It can be used to pay traditionally at all points where Visa cards are accepted, as well as via Google Pay and Samsung Pay.
A “plastic” payment from Binance looks like this: funds held on the exchange in cryptocurrencies are converted at the current rate into the appropriate amount of fiat currency, e.g. EUR or USD. The issuance and use of the Binance card itself is free, and you can get moneyback for the payments made. The above capabilities are still not all that Binance has to offer. As you can see in the graphic below, there are many more options available.
