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BEP-20 is a Binance Smart Chain token standard created with the intention of extending ERC-20, which is one of the most common Ethereum token standards out there. BEP-20 is a blueprint as to how a token can be spent, who can spend it, and it even has rules about its overall usage.
The BEP-20 standard was both derived from and fully compatible with the ERC-20 standard, and the code of the functions that define the BEP-20 standard are modifications of the ERC-20 standard. These modifications were done and intended to improve the protocol while also optimizing its speed as well as transaction cost. In fact, BEP-20 was conceived as this technical specification for the Binance Smart CHain with the goal of actually providing a flexible format through which many developers can launch different tokens. These tokens could represent anything from shares within a business to dollars, which are stored in a bank vault such as stablecoins.