Sui, a layer-1 blockchain network, is preparing to launch Hashi, an institutional protocol that allows Bitcoin owners to borrow against their holdings without transferring their BTC away from the Bitcoin blockchain.

The new initiative is expected to strengthen Bitcoin-backed lending by bringing significant capital into the ecosystem. Hashi’s mainnet rollout is planned in multiple stages later this month, providing institutions with a way to put their Bitcoin holdings to work while retaining the assets on the original network.

The project has secured $500 million in capital commitments from a group of more than 20 industry partners. Although the pledged capital has not necessarily been deposited, the commitments are intended to establish a substantial liquidity base when the protocol launches.

Adeniyi Abiodun, co-founder and chief product officer of Mysten Labs, the original developer of Sui, said Hashi’s combination of financial backing and industry participation reflects institutional demand for Bitcoin financial services that preserve required security protections.

The protocol aims to unlock Bitcoin holdings that are otherwise sitting idle. Sui estimates that approximately $1 trillion worth of BTC remains unused. Companies and institutional investors have struggled to find compliant, transparent infrastructure that allows them to deploy their native Bitcoin in decentralized finance (DeFi).

Bitcoin-backed borrowing is also gaining practical applications beyond speculative cryptocurrency trading. Holders are increasingly using loans secured by BTC to cover expenses such as university fees, property purchases and corporate working capital.

Nathan McCauley, co-founder and CEO of Anchorage Digital, said public companies and institutions hold large Bitcoin reserves but face technological limitations that prevent them from fully utilizing those assets. Anchorage Digital is an initial Hashi partner and plans to supply stablecoin liquidity to the protocol.

McCauley added that integrating Anchorage Digital’s institutional clients with Hashi could significantly change how they access financial services using Bitcoin as collateral.

Instead of relying on cross-chain bridges, Hashi lets users lock their BTC in a vault address directly on the Bitcoin blockchain. A 2-of-2 multisignature mechanism protects the vault, requiring cryptographic authorization from both Hashi validators. A separate guardian layer also monitors collateral movements and is designed to delay suspicious transactions.

After the Bitcoin is locked, Hashi issues hBTC tokens on Sui that represent the deposited assets. The original BTC remains on the Bitcoin network, while the corresponding hBTC tokens can be used within Sui’s decentralized finance ecosystem.

These tokens can support lending, borrowing, credit markets and real-world asset trading. When users want to recover their Bitcoin, the corresponding hBTC tokens are permanently burned on Sui. This triggers the multisignature process that unlocks the original BTC and returns it to the owner.

Hashi has undergone additional security checks to address institutional concerns. Certora formally verified its smart contracts, while CommonPrefix reviewed the cryptographic design of its multi-party computation (MPC) protocol.