Mysten launches confidential settlement prototype on Sui

Mysten Labs launches Tessera: Enterprise privacy settlement prototype

Mysten Labs has released Tessera, a business-to-business (B2B) settlement prototype that hides payment amounts while retaining controlled access for counterparties, regulators and auditors.

Summary

Tessera allows KYC-certified companies to use a confidential stablecoin to settle invoices. Payment amounts remain encrypted, while counterparties can view transactions involving themselves. Seal MPC provides limited, time-limited access to regulators, tax authorities and dispute arbitrators. The prototype supports one-time transfers, regular payments, and dispute payment arbitration.

Tessera brings private B2B settlement to Sui

In an X tweet on August 10, Sui described Tessera as a closed settlement network for businesses. Approved members can use a confidential stablecoin to settle invoices without having to publicly list the value of each transaction.

The blockchain will still show who made payments to whom and when the payments occurred, but the amount is encrypted to external observers. "Institutions will not settle on a track where competitors can see pricing and transaction volume," Sui said. A company can see the exact amount it trades, but competitors cannot see it when viewing the same activity. The design is designed to prevent public blockchain from exposing supplier pricing, transaction volume, capital flows and other commercially sensitive information.

Membership is limited through Know Your Customer (KYC) review. Network operators can add members and fund them, freezing individual accounts or suspending the entire settlement network if necessary. Tessera supports one-time transfers and regular payment channels. If a transaction becomes controversial, the network can temporarily grant the arbitrator the right to view the relevant payment.

Seal MPC controls viewing rights for payment amounts

Tessera combines Sui's secure transfer technology with Mysten's Seal system, which is used to encrypt data and programmable on-chain access control. Seal uses threshold encryption technology to decentralize control of the decryption key to multiple participants. Its policies can determine who has access, what information can be viewed, and how long that privilege lasts.

In Tessera's presentation, prudential regulators could gain visibility across the entire network; tax authorities 'access might be limited to data involving a member; and arbitrators could only view disputed transactions and were only valid for the duration of the case. These authorities are all scope, time-limited and revocable. Sui said no authorized viewer could move underlying funds.

The prototype expands the confidential transfer function that was opened for public beta in June this year. This feature encrypts the token balance and transfer amount, but retains visibility of the address, token type, and timestamp. Sui's confidential transfers use Twisted ElGamal encryption and zero-knowledge certificates to verify the validity of payments without revealing the amount, thereby preventing overdrafts or unauthorized token creation, while maintaining the privacy of the amount.

Blockchain competes to meet institutional privacy needs

Public visibility has become a major obstacle for companies considering blockchain settlements. Companies may not want competitors to monitor their salaries, supplier terms, trading positions or funding activity.

Other networks are solving the same problem. XRP Ledger's validators are considering introducing confidential transfers to target the tokenized asset market of more than $530 million. Circle has also launched Arc Privacy for enterprise-level confidential smart contracts. Similar to Tessera, Arc's model is designed to hide sensitive financial activity while retaining access to audit and compliance reviews.

Tessera is different from privacy coins that focus on anonymity in that it does not hide all parts of the payment. Identified participants and authorized oversight bodies remain at the heart of its design. For U.S. institutions, these controls may help meet internal compliance and reporting processes, but the announcement does not clearly state the issuer of the stablecoin, regulatory approval, or jurisdiction in which business was initiated.

SUI responded flatly to prototype

According to CoinGecko data, after the announcement, SUI traded at approximately US$0.69, with a 24-hour range of fluctuations ranging from US$0.684 to US$0.704. There were no price changes for the token that were clearly related to Tessera.

Mysten describes Tessera as a prototype rather than a production network. Sui did not provide a public release date, a list of participating companies or a deployment timetable. The next step will be to verify whether the model can move from controlled demonstrations to practical applications, supporting regulated companies with different privacy, reporting and dispute resolution needs.