Hashi’s testnet went live on Sui this week with a new Guardian Layer security architecture, a defense-in-depth system built to help institutions move Bitcoin collateral into onchain lending and credit markets.
Key Takeaways
- Hashi’s testnet launched on Sui, opening development of Bitcoin-backed lending and credit applications ahead of mainnet.
- The Guardian Layer secures BTC collateral with a 2-of-2 multisig requiring both a validator MPC signature and a separate guardian signature.
- Wave Digital Assets committed to three years of best efforts to prioritize Bitcoin-yield bond products built on Hashi.
- Law firm Fenwick concluded Hashi’s deposit and redemption mechanics should not count as taxable events under US tax law.
- More than 25 partners, including BitGo, Ledger, Cumberland, and FalconX, have signed on across custody, liquidity, and DeFi.
What Happened?
Hashi, a Bitcoin finance protocol from Mysten Labs, opened its testnet on Sui and introduced the Guardian Layer for the first time. The testnet gives custodians, lenders, and infrastructure providers a way to build and test Bitcoin-backed applications before the protocol reaches mainnet.
More than $1 trillion in Bitcoin sits largely dormant, held for its store-of-value role and rarely put to work in credit markets. Hashi aims to change that by letting institutions post native BTC as collateral onchain, a capability the current crypto lending market has struggled to offer for the asset. Law firm Fenwick concluded that Hashi’s deposit and redemption mechanics should not constitute taxable events under US tax law, addressing a concern that has kept many holders on the sidelines.
BREAKING: Sui’s Hashi testnet is now live, allowing builders to use Bitcoin as programmable collateral without moving it off the Bitcoin network.
— MSB Intel (@MSBIntel) July 22, 2026
The launch includes a new Guardian Layer and 25+ ecosystem partners. pic.twitter.com/nV9kUBwzTX
Inside the Guardian Layer
The Guardian Layer secures every unit of BTC collateral, or UTXO, with a 2-of-2 multisig. Each movement requires an MPC signature from Hashi’s validators and a separate signature from the guardian, adding a second approval before collateral can leave the system.
The protocol describes the feature as configurable safeguards that can slow or block potentially malicious activity before collateral moves. These controls sit alongside automated collateral management, verifiable loan terms, and onchain visibility into collateral health. Hashi positions the guardian as a prerequisite for institutional crypto adoption, a required gate on every collateral movement.
What the testnet does not yet show is also worth naming. The protocol has not disclosed a mainnet date, has not detailed the identity or configuration of guardian operators, and cannot yet demonstrate how the safeguards hold up under live adversarial conditions. Those questions stay open until mainnet.
Institutional Partners Line Up
The partner roster spans custody, liquidity, and DeFi. Custody and wallet providers include BitGo, Blockdaemon, Cobo, Fordefi, Ledger, and SwissBorg. Liquidity comes from Bullish, Cumberland, Erebor, and FalconX, while native Sui protocols such as AlphaLend, Bluefin, Scallop, Suilend, and Navi handle lending and borrowing across the Bitcoin DeFi segment.
Wave Digital Assets, an SEC-registered investment adviser, deepened its role by committing to three years of best efforts to prioritize Bitcoin-yield bond products built on Hashi. Adeniyi Abiodun, Co-Founder and Chief Product Officer of Mysten Labs said:
CoinLaw’s Takeaway
The Guardian Layer targets the specific reason institutions have kept native Bitcoin out of onchain credit, namely the fear that a bridge or custody failure could drain collateral with no second check. A 2-of-2 multisig that splits signing between validators and an independent guardian gives risk teams a control they can point to, and the Fenwick tax opinion removes a separate blocker around taxable events. Testnet is where those claims get tested rather than proven.
The breadth of the partner base, covering custody, market making, DeFi, and insurance, signals that the demand side is ready if the security model holds. Bitcoin’s role as productive collateral rather than a passive reserve depends on infrastructure that institutions trust under stress, and the testnet phase is the first real measure of whether Hashi’s design meets that bar.
