Sui's native Bitcoin finance primitive, called Hashi, is preparing for its global testnet launch this July with support from major institutional players including Cumberland, Fluid, and SwissBorg. The initiative represents a significant shift in how crypto custody and collateral work at scale, moving away from centralized intermediaries toward verifiable smart contract logic that keeps Bitcoin secure on its native blockchain while enabling productive financial use.

What Problem Is Hashi Actually Solving?

Bitcoin holders face a persistent problem: their assets sit idle. While Bitcoin's market cap exceeds $1.2 trillion, most of that capital generates no yield and cannot be used as collateral in decentralized finance (DeFi) applications. Historically, users who wanted to unlock Bitcoin's productive potential had to trust centralized intermediaries like Celsius, Voyager, and Genesis to lend out their holdings. When those platforms collapsed, it exposed the systemic risks of relying on opaque, centralized balance sheets.

Hashi replaces that trust model with transparent, verifiable smart contracts. The protocol maintains a strict separation for safety: Bitcoin remains on the Bitcoin blockchain, fully under the user's control. Meanwhile, Sui smart contracts handle the cryptographic rights and programmatic logic that enable Bitcoin to function as collateral for loans, borrowing, and credit products. This architecture eliminates the need for users to hand over custody of their Bitcoin to a third party.

"Bitcoin is the world's most liquid digital asset, but without native utility, it remains an off-chain asset. Hashi is exciting because it introduces a transparent, institutional-grade framework for BTC-backed credit that will replace synthetic workarounds with a product we are excited to use ourselves," said Paul Kremsky, Global Head of Business Development at Cumberland.

Paul Kremsky, Global Head of Business Development at Cumberland

Who Is Building on Hashi and Why?

The three newest members of the Hashi ecosystem bring significant institutional credibility and reach. Cumberland, one of the digital asset industry's largest institutional market makers, is evaluating Hashi's structural frameworks and preparing for eventual on-chain liquidity provisioning. SwissBorg, a European wealth management app with over one million users, is exploring ways to connect its network of high-net-worth Bitcoin holders to Hashi for lending and borrowing opportunities. Fluid, a major DeFi lending protocol, is building institutional-grade lending markets to deepen access to Bitcoin-backed credit on Sui.

These organizations join an already substantial coalition of infrastructure providers, custodians, and DeFi protocols working on Hashi. The broader ecosystem includes BitGo for institutional custody, Ledger for retail and institutional self-custody, Blockdaemon and Cobo for wallet infrastructure, and native DeFi protocols like AlphaLend, Bluefin, and Suilend that will enable retail lending and borrowing from day one.

How Does Hashi Differ From Traditional Bitcoin Finance?

Traditional approaches to Bitcoin finance rely on wrapped tokens or synthetic representations of Bitcoin on other blockchains. These workarounds introduce counterparty risk and require users to trust the entity managing the wrapped token. Hashi takes a different approach by keeping Bitcoin native and using cryptographic proofs to establish verifiable rights to that Bitcoin on Sui's blockchain. This means users never have to move their Bitcoin off the Bitcoin network, reducing custody risk while still enabling full participation in DeFi.

The testnet launch scheduled for July represents what Sui calls "the ultimate rehearsal for fully changing Bitcoin Finance." During this sandbox environment, institutional engineers, Sui protocols, developers, and custody partners will test integration parameters, stress-test the code under simulated market volatility, and verify cryptographic integrity before mainnet release.

Steps to Understanding Hashi's Institutional Custody Model

• Native Bitcoin Security: Bitcoin remains on the Bitcoin blockchain under the user's full control, eliminating the need to transfer assets to a third-party custodian or wrapped-token intermediary.
• Verifiable Smart Contracts: Sui smart contracts use cryptographic proofs to establish and manage rights to Bitcoin collateral, making all loan terms, risk parameters, and credit origination fully transparent and auditable on-chain.
• Institutional-Grade Infrastructure: The ecosystem includes custody providers like BitGo and Ledger, market makers like Cumberland, and lending protocols like Fluid, creating a complete financial stack for institutional Bitcoin finance.
• Testnet Validation: The July global testnet allows institutions to stress-test integrations and verify the protocol's security before committing real capital to mainnet lending and borrowing.

Why Institutional Adoption Matters for Crypto Custody Standards

The involvement of institutional players signals a maturation of crypto custody practices. Rather than relying on centralized platforms that hold assets on their balance sheets, institutions are now building infrastructure around self-custody and verifiable on-chain logic. This shift aligns with broader regulatory trends favoring transparency and reducing systemic risk.

"Hashi was built to unlock the productive use of Bitcoin at a scale the industry hasn't seen before. We believe Bitcoin will become one of the largest sources of collateral in finance as the world moves on-chain, and Hashi provides the foundation to make that possible on Sui," explained Adeniyi Abiodun, Co-Founder and Chief Product Officer of Mysten Labs, the original contributor to Sui.

Adeniyi Abiodun, Co-Founder and Chief Product Officer of Mysten Labs

The protocol also introduces institutional-grade insurance and formal verification auditing through partners like Soter Insure and firms including Asymptotic, Certora, and OtterSec. These security measures address one of the primary concerns institutions have when moving capital on-chain: the risk of smart contract vulnerabilities or exploits.

For retail users and smaller institutions, the practical implication is clear: self-custody combined with verifiable smart contract logic offers a middle ground between the convenience of centralized platforms and the security of holding assets directly. As Hashi's testnet approaches, the crypto industry will gain real-world data on whether this model can scale to institutional volumes without compromising security or decentralization.