The Brazilian exchange Mercado Bitcoin (MB) announced on Thursday (29) an expanded partnership with the Sui blockchain to make new digital assets available to Brazilian users and to develop financial products based on Bitcoin. The initiative will let the exchange's customers buy, sell and transfer cryptocurrencies on the network, and also opens the door to exploring uses of BTC in onchain financial applications.
The initial update involves the integration of three assets: SUI, the blockchain's native cryptocurrency, and the dollar-pegged stablecoins USDC and USDsui. Users will be able to buy, sell, send and receive these assets directly through the Mercado Bitcoin platform.
The partnership also outlines two future development tracks: integrating Hashi technology, built to allow bitcoins to be used as collateral in decentralised finance (DeFi) operations, and issuing Mercado Bitcoin's tokenised assets on the Sui network.
"Millions of people across Brazil now have access to Sui through Mercado Bitcoin. Over more than a decade we have built regulated infrastructure for digital assets in the country, with integration to Pix [Brazil's instant payment system] and a direct connection between the Brazilian real and crypto," says Roberto Dagnoni, chairman of Mercado Bitcoin's board.
According to the executive, the company also intends to use the partnership to expand the possibilities for moving digital assets internationally, drawing on infrastructure being developed to connect Brazil to other markets.
"We are now extending that reach through the international corridors we are developing for the United States and Portugal. Bringing Sui into this infrastructure means opening a new network to millions of Brazilians within a regulated environment," Dagnoni adds.
Also read: Mercado Bitcoin applies for a crypto licence with Brazil's central bank
In an interview with Portal do Bitcoin, Jon Campagna, head of Hashi and onchain capital markets partnerships at Mysten Labs, the company behind Sui's development, explained that the goal is to widen the ways Bitcoin can be used, given that it is traditionally held by investors as a store of value.
"There is more than US$1 trillion in Bitcoin sitting largely idle. I spent years talking to institutions and individuals holding the asset, and the question was always the same: how can I use my Bitcoin without selling it or handing it to someone I need to trust?" the executive said.
According to Campagna, Hashi technology was developed precisely to let investors use their bitcoins in financial services without having to transfer them to a centralised institution.
Integrating this kind of use into Mercado Bitcoin, however, is still under development and has no set date for reaching Brazilian customers. For now, the update is the availability of Sui network assets.
How do Hashi's Bitcoin-backed loans work?
The main innovation the companies could explore in future is the ability to use Bitcoin as collateral to obtain loans in stablecoins.
In practice, the idea is to let someone holding Bitcoin access funds without having to sell their cryptocurrency. The mechanism relies on Hashi, technology that connects Bitcoin to Sui's decentralised finance applications.
According to Campagna, the investor deposits their bitcoins into a wallet controlled by the Hashi system, but the original assets remain on the Bitcoin network itself. A representation of those bitcoins is then created on the Sui blockchain, called hBTC, which can be used in financial applications.
With this representation, the investor can offer the value of their bitcoins as collateral and take out a loan in stablecoins, subject to the conditions set by the lending platform.
On the other side of the transaction are investors who hold stablecoins and want to make their funds available for lending.
Campagna explains that Hashi will work with partner protocols, such as Fluid, to connect these two groups. "Lenders deposit stablecoins into the protocol and borrowers use the Bitcoin represented by Hashi as collateral to borrow those funds. The borrower pays interest, and whoever lent the funds receives that interest. The rate varies with demand," he explained.
So the greater the demand for loans relative to the amount of funds available, the higher the rate tends to be for borrowers and for liquidity providers.
Asked whether the interest rates could be lower than those charged by Brazilian banks, the executive said the technology could offer an alternative to traditional credit, but avoided a numerical comparison. That is because Hashi itself does not set loan rates. The figures will depend on the protocols that use the technology, demand for funds, and other factors such as currency-hedging costs.
For Brazilian users, eventual integration would allow access to these services directly through the Mercado Bitcoin app, without needing different wallets and decentralised applications.
"To reach scale, this product needs to be in the apps people already use, like Mercado Bitcoin. This kind of partnership is what brings the technology to more customers," Campagna said.
The structure, however, does not eliminate the risks of crypto-backed loans. A drop in the value of the Bitcoin used as collateral may require posting additional funds or trigger liquidation of the position, depending on the protocol's rules. There are also risks tied to how the smart contracts function.
Bitcoin security is a priority, says Sui executive
One of the main challenges in expanding Bitcoin-backed lending is ensuring the security of assets deposited by users.
Campagna explained that Hashi uses several mechanisms to control the movement of the cryptocurrencies, including smart contracts, shared-authorisation systems and an additional protection layer called a "guardian".
According to him, this layer acts as an extra check, limiting how much Bitcoin can be moved within a given period. "We do this on purpose, because it allows us to stop a suspicious movement before an event happens, such as a Bitcoin theft," he said.
This additional protection, however, means operations will not necessarily be instant. According to Campagna, users will need to wait for confirmations from the Bitcoin network itself for certain movements. The executive cited a window of roughly 20 minutes to one hour, depending on network conditions.
The system is also still going through audit stages and formal security verification. In the interview, Campagna said the smart contracts are already operational and that the team is working to make the technology available to the public soon. The rollout will also depend on integration with the platforms involved.
The executive also linked the focus on security to the problems faced by the crypto lending market in 2022, when firms such as Celsius and BlockFi went into crisis. According to him, some investors began avoiding services where they could not track how their cryptocurrencies were being used.
Hashi's approach is to use blockchain transparency mechanisms to give greater visibility over the assets deposited as collateral and the rules governing the operations.
Stablecoins and tokenisation also part of the partnership's plans
Beyond the lending possibilities, Sui's arrival on Mercado Bitcoin expands the range of stablecoins available to Brazilian customers.
The partnership will allow trading of USDC and USDsui over the Sui network, which, according to the companies, enables transfers of these assets without network fees under certain conditions.
The move comes amid growing stablecoin use in Brazil. According to data from Brazil's federal tax authority, the Receita Federal, cited in the announcement, these cryptocurrencies already account for around 80% of the declared volume of digital asset transactions in the country.
Sui also says it has processed more than US$1 trillion in stablecoin transfers over the past 12 months.
Another track concerns tokenised real-world assets, known by the acronym RWA, which represent investments and financial rights recorded on a blockchain.
Since 2019, Mercado Bitcoin has carried out more than 800 tokenised asset issuances, including products linked to receivables, structured credit, consortiums and real estate, according to figures released by the company.
With the partnership, the companies intend to assess bringing some of these assets onto the Sui blockchain, widening the options for issuance and distribution.
For Campagna, Brazil is an important market for this expansion because it has a large number of cryptocurrency investors and well-developed digital payments infrastructure.
He singled out Pix, which he considers an example of how quickly Brazilians adopt new financial solutions when they are made available through familiar services.
"Brazil is a central piece for Sui's next phase of growth. Pix showed how quickly Brazilians adopt better financial infrastructure when they can access it through a familiar app," he said.
Dagnoni, of Mercado Bitcoin, also noted that the partnership connects the Sui blockchain to the financial infrastructure Brazilian customers already use. "Bringing Sui into this infrastructure means opening a new network to millions of Brazilians within a regulated environment," he said.
Despite the expansion plans, the companies have not yet disclosed which credit products or tokenised assets will actually launch on Sui, nor when these features will become available to the public.
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