Sui-Based Bitcoin Infrastructure Project Hashi Launches Testnet, Targets Institutional DeFi

Hashi, a Bitcoin financial infrastructure project built on the layer-1 blockchain Sui, officially launched its testnet on July 23. The rollout allows financial institutions and blockchain builders to validate Bitcoin-based lending and credit applications in conditions resembling a live operating environment ahead of the mainnet launch.

A key feature of the testnet is the Guardian Layer, a multi-layered risk management system aimed at institutional investors. It acts as a secondary defense mechanism that can delay or block malicious transaction attempts before Bitcoin collateral is moved outside the system.

All Bitcoin collateral is secured through a 2-of-2 multisignature structure requiring both a multi-party computation, or MPC, signature from Hashi validators and a guardian signature. The structure is designed to give financial institutions transparency while tightly controlling operational risks that can arise in managing large collateral pools.

Hashi also obtained a legal interpretation on tax risk, long cited as one of the biggest barriers to institutional adoption. Fenwick, a law firm focused on digital assets, concluded that the mechanism for depositing and repaying native Bitcoin in Hashi's on-chain market would not constitute a taxable transaction under U.S. tax law.

Bitcoin largely remains parked in wallets as a held asset. Beginning with the testnet, Hashi plans to build institutional Bitcoin lending, borrowing and credit markets within the Sui ecosystem as it seeks to expand Bitcoin's use in real-world finance.

"Every major asset class ultimately develops mature credit, lending and liquidity markets, and Bitcoin is no exception," Adeniyi Abiodun, co-founder and chief product officer at Mysten Labs, Sui's original developer, said in a statement. He added that Hashi will provide the security, transparency and programmability institutions have long demanded, helping developers build on-chain financial markets.

Software development kit documentation and integration guides for building Bitcoin financial applications are immediately available on Hashi's official website.