diff --git a/modules/apps/callbacks/testing/simapp/app.go b/modules/apps/callbacks/testing/simapp/app.go
index 103ace1277f..764d430f802 100644
--- a/modules/apps/callbacks/testing/simapp/app.go
+++ b/modules/apps/callbacks/testing/simapp/app.go
@@ -390,6 +390,7 @@ func NewSimApp(
 		appCodec, runtime.NewKVStoreService(keys[ibctransfertypes.StoreKey]), app.GetSubspace(ibctransfertypes.ModuleName),
 		app.IBCFeeKeeper, // ISC4 Wrapper: fee IBC middleware
 		app.IBCKeeper.ChannelKeeper,
+		app.IBCKeeper.ChannelKeeperV2,
 		app.AccountKeeper, app.BankKeeper,
 		authtypes.NewModuleAddress(govtypes.ModuleName).String(),
 	)
diff --git a/modules/apps/transfer/keeper/keeper.go b/modules/apps/transfer/keeper/keeper.go
index 799c8eb218e..ba3ed9dff7c 100644
--- a/modules/apps/transfer/keeper/keeper.go
+++ b/modules/apps/transfer/keeper/keeper.go
@@ -29,10 +29,11 @@ type Keeper struct {
 	cdc            codec.BinaryCodec
 	legacySubspace types.ParamSubspace
 
-	ics4Wrapper   porttypes.ICS4Wrapper
-	channelKeeper types.ChannelKeeper
-	AuthKeeper    types.AccountKeeper
-	BankKeeper    types.BankKeeper
+	ics4Wrapper     porttypes.ICS4Wrapper
+	channelKeeper   types.ChannelKeeper
+	channelKeeperV2 types.ChannelKeeperV2
+	AuthKeeper      types.AccountKeeper
+	BankKeeper      types.BankKeeper
 
 	// the address capable of executing a MsgUpdateParams message. Typically, this
 	// should be the x/gov module account.
@@ -46,6 +47,7 @@ func NewKeeper(
 	legacySubspace types.ParamSubspace,
 	ics4Wrapper porttypes.ICS4Wrapper,
 	channelKeeper types.ChannelKeeper,
+	channelKeeperV2 types.ChannelKeeperV2,
 	authKeeper types.AccountKeeper,
 	bankKeeper types.BankKeeper,
 	authority string,
@@ -60,14 +62,15 @@ func NewKeeper(
 	}
 
 	return Keeper{
-		cdc:            cdc,
-		storeService:   storeService,
-		legacySubspace: legacySubspace,
-		ics4Wrapper:    ics4Wrapper,
-		channelKeeper:  channelKeeper,
-		AuthKeeper:     authKeeper,
-		BankKeeper:     bankKeeper,
-		authority:      authority,
+		cdc:             cdc,
+		storeService:    storeService,
+		legacySubspace:  legacySubspace,
+		ics4Wrapper:     ics4Wrapper,
+		channelKeeper:   channelKeeper,
+		channelKeeperV2: channelKeeperV2,
+		AuthKeeper:      authKeeper,
+		BankKeeper:      bankKeeper,
+		authority:       authority,
 	}
 }
 
diff --git a/modules/apps/transfer/keeper/keeper_test.go b/modules/apps/transfer/keeper/keeper_test.go
index e80c8400e68..a3f9c77e75c 100644
--- a/modules/apps/transfer/keeper/keeper_test.go
+++ b/modules/apps/transfer/keeper/keeper_test.go
@@ -60,6 +60,7 @@ func (suite *KeeperTestSuite) TestNewKeeper() {
 				suite.chainA.GetSimApp().GetSubspace(types.ModuleName),
 				suite.chainA.GetSimApp().IBCKeeper.ChannelKeeper,
 				suite.chainA.GetSimApp().IBCKeeper.ChannelKeeper,
+				suite.chainA.GetSimApp().IBCKeeper.ChannelKeeperV2,
 				suite.chainA.GetSimApp().AccountKeeper,
 				suite.chainA.GetSimApp().BankKeeper,
 				suite.chainA.GetSimApp().ICAControllerKeeper.GetAuthority(),
@@ -72,6 +73,7 @@ func (suite *KeeperTestSuite) TestNewKeeper() {
 				suite.chainA.GetSimApp().GetSubspace(types.ModuleName),
 				suite.chainA.GetSimApp().IBCKeeper.ChannelKeeper,
 				suite.chainA.GetSimApp().IBCKeeper.ChannelKeeper,
+				suite.chainA.GetSimApp().IBCKeeper.ChannelKeeperV2,
 				authkeeper.AccountKeeper{}, // empty account keeper
 				suite.chainA.GetSimApp().BankKeeper,
 				suite.chainA.GetSimApp().ICAControllerKeeper.GetAuthority(),
@@ -84,6 +86,7 @@ func (suite *KeeperTestSuite) TestNewKeeper() {
 				suite.chainA.GetSimApp().GetSubspace(types.ModuleName),
 				suite.chainA.GetSimApp().IBCKeeper.ChannelKeeper,
 				suite.chainA.GetSimApp().IBCKeeper.ChannelKeeper,
+				suite.chainA.GetSimApp().IBCKeeper.ChannelKeeperV2,
 				suite.chainA.GetSimApp().AccountKeeper,
 				suite.chainA.GetSimApp().BankKeeper,
 				"", // authority
diff --git a/modules/apps/transfer/keeper/msg_server.go b/modules/apps/transfer/keeper/msg_server.go
index 74d5d59f2e5..5b0956cb2a1 100644
--- a/modules/apps/transfer/keeper/msg_server.go
+++ b/modules/apps/transfer/keeper/msg_server.go
@@ -10,7 +10,8 @@ import (
 	"github.com/cosmos/ibc-go/v10/modules/apps/transfer/internal/events"
 	"github.com/cosmos/ibc-go/v10/modules/apps/transfer/internal/telemetry"
 	"github.com/cosmos/ibc-go/v10/modules/apps/transfer/types"
-	channeltypes "github.com/cosmos/ibc-go/v10/modules/core/04-channel/types"
+	clienttypes "github.com/cosmos/ibc-go/v10/modules/core/02-client/types"
+	channeltypesv2 "github.com/cosmos/ibc-go/v10/modules/core/04-channel/v2/types"
 	ibcerrors "github.com/cosmos/ibc-go/v10/modules/core/errors"
 )
 
@@ -29,16 +30,6 @@ func (k Keeper) Transfer(goCtx context.Context, msg *types.MsgTransfer) (*types.
 		return nil, err
 	}
 
-	channel, found := k.channelKeeper.GetChannel(ctx, msg.SourcePort, msg.SourceChannel)
-	if !found {
-		return nil, errorsmod.Wrapf(channeltypes.ErrChannelNotFound, "port ID (%s) channel ID (%s)", msg.SourcePort, msg.SourceChannel)
-	}
-
-	appVersion, found := k.ics4Wrapper.GetAppVersion(ctx, msg.SourcePort, msg.SourceChannel)
-	if !found {
-		return nil, errorsmod.Wrapf(ibcerrors.ErrInvalidRequest, "application version not found for source port: %s and source channel: %s", msg.SourcePort, msg.SourceChannel)
-	}
-
 	coin := msg.Token
 
 	// Using types.UnboundedSpendLimit allows us to send the entire balance of a given denom.
@@ -54,31 +45,76 @@ func (k Keeper) Transfer(goCtx context.Context, msg *types.MsgTransfer) (*types.
 		return nil, err
 	}
 
-	if err := k.SendTransfer(ctx, msg.SourcePort, msg.SourceChannel, token, sender); err != nil {
-		return nil, err
+	packetData := types.NewFungibleTokenPacketData(token.Denom.Path(), token.Amount, sender.String(), msg.Receiver, msg.Memo)
+
+	if err := packetData.ValidateBasic(); err != nil {
+		return nil, errorsmod.Wrapf(err, "failed to validate %s packet data", types.V1)
 	}
 
-	packetDataBytes, err := createPacketDataBytesFromVersion(
-		appVersion, sender.String(), msg.Receiver, msg.Memo, token,
-	)
+	// if a channel exists with source channel, then use IBC V1 protocol
+	// otherwise use IBC V2 protocol
+	channel, isIBCV1 := k.channelKeeper.GetChannel(ctx, msg.SourcePort, msg.SourceChannel)
+
+	var sequence uint64
+	if isIBCV1 {
+		// if a V1 channel exists for the source channel, then use IBC V1 protocol
+		sequence, err = k.transferV1Packet(ctx, msg.SourceChannel, token, msg.TimeoutHeight, msg.TimeoutTimestamp, packetData)
+		// telemetry for transfer occurs here, in IBC V2 this is done in the onSendPacket callback
+		telemetry.ReportTransfer(msg.SourcePort, msg.SourceChannel, channel.Counterparty.PortId, channel.Counterparty.ChannelId, token)
+	} else {
+		// otherwise try to send an IBC V2 packet, if the sourceChannel is not a IBC V2 client
+		// then core IBC will return a CounterpartyNotFound error
+		sequence, err = k.transferV2Packet(ctx, msg.Encoding, msg.SourceChannel, msg.TimeoutTimestamp, packetData)
+	}
 	if err != nil {
 		return nil, err
 	}
 
-	sequence, err := k.ics4Wrapper.SendPacket(ctx, msg.SourcePort, msg.SourceChannel, msg.TimeoutHeight, msg.TimeoutTimestamp, packetDataBytes)
+	k.Logger(ctx).Info("IBC fungible token transfer", "token", coin, "sender", msg.Sender, "receiver", msg.Receiver)
+
+	return &types.MsgTransferResponse{Sequence: sequence}, nil
+}
+
+func (k Keeper) transferV1Packet(ctx sdk.Context, sourceChannel string, token types.Token, timeoutHeight clienttypes.Height, timeoutTimestamp uint64, packetData types.FungibleTokenPacketData) (uint64, error) {
+	if err := k.SendTransfer(ctx, types.PortID, sourceChannel, token, sdk.MustAccAddressFromBech32(packetData.Sender)); err != nil {
+		return 0, err
+	}
+
+	packetDataBytes := packetData.GetBytes()
+	sequence, err := k.ics4Wrapper.SendPacket(ctx, types.PortID, sourceChannel, timeoutHeight, timeoutTimestamp, packetDataBytes)
 	if err != nil {
-		return nil, err
+		return 0, err
 	}
 
-	events.EmitTransferEvent(ctx, sender.String(), msg.Receiver, token, msg.Memo)
+	events.EmitTransferEvent(ctx, packetData.Sender, packetData.Receiver, token, packetData.Memo)
 
-	destinationPort := channel.Counterparty.PortId
-	destinationChannel := channel.Counterparty.ChannelId
-	telemetry.ReportTransfer(msg.SourcePort, msg.SourceChannel, destinationPort, destinationChannel, token)
+	return sequence, nil
+}
 
-	k.Logger(ctx).Info("IBC fungible token transfer", "token", coin, "sender", msg.Sender, "receiver", msg.Receiver)
+func (k Keeper) transferV2Packet(ctx sdk.Context, encoding, sourceChannel string, timeoutTimestamp uint64, packetData types.FungibleTokenPacketData) (uint64, error) {
+	if encoding == "" {
+		encoding = types.EncodingJSON
+	}
 
-	return &types.MsgTransferResponse{Sequence: sequence}, nil
+	data, err := types.MarshalPacketData(packetData, types.V1, encoding)
+	if err != nil {
+		return 0, err
+	}
+
+	payload := channeltypesv2.NewPayload(
+		types.PortID, types.PortID,
+		types.V1, encoding, data,
+	)
+	msg := channeltypesv2.NewMsgSendPacket(
+		sourceChannel, timeoutTimestamp,
+		packetData.Sender, payload,
+	)
+
+	res, err := k.channelKeeperV2.SendPacket(ctx, msg)
+	if err != nil {
+		return 0, err
+	}
+	return res.Sequence, nil
 }
 
 // UpdateParams defines an rpc handler method for MsgUpdateParams. Updates the ibc-transfer module's parameters.
diff --git a/modules/apps/transfer/keeper/msg_server_test.go b/modules/apps/transfer/keeper/msg_server_test.go
index e658bdf648e..312f8557925 100644
--- a/modules/apps/transfer/keeper/msg_server_test.go
+++ b/modules/apps/transfer/keeper/msg_server_test.go
@@ -3,6 +3,7 @@ package keeper_test
 import (
 	"errors"
 	"strings"
+	"time"
 
 	sdk "github.com/cosmos/cosmos-sdk/types"
 	banktypes "github.com/cosmos/cosmos-sdk/x/bank/types"
@@ -11,7 +12,8 @@ import (
 	abci "github.com/cometbft/cometbft/abci/types"
 
 	"github.com/cosmos/ibc-go/v10/modules/apps/transfer/types"
-	channeltypes "github.com/cosmos/ibc-go/v10/modules/core/04-channel/types"
+	clienttypes "github.com/cosmos/ibc-go/v10/modules/core/02-client/types"
+	clienttypesv2 "github.com/cosmos/ibc-go/v10/modules/core/02-client/v2/types"
 	ibcerrors "github.com/cosmos/ibc-go/v10/modules/core/errors"
 	ibctesting "github.com/cosmos/ibc-go/v10/testing"
 )
@@ -90,7 +92,7 @@ func (suite *KeeperTestSuite) TestMsgTransfer() {
 			func() {
 				msg.SourceChannel = "channel-100"
 			},
-			channeltypes.ErrChannelNotFound,
+			clienttypesv2.ErrCounterpartyNotFound,
 		},
 	}
 
@@ -109,7 +111,7 @@ func (suite *KeeperTestSuite) TestMsgTransfer() {
 				ibctesting.TestCoin,
 				suite.chainA.SenderAccount.GetAddress().String(),
 				suite.chainB.SenderAccount.GetAddress().String(),
-				suite.chainB.GetTimeoutHeight(), 0, // only use timeout height
+				clienttypes.Height{}, suite.chainB.GetTimeoutTimestamp(), // only use timeout height
 				"memo",
 			)
 
@@ -160,6 +162,151 @@ func (suite *KeeperTestSuite) TestMsgTransfer() {
 	}
 }
 
+// TestMsgTransfer tests Transfer rpc handler with IBC V2 protocol
+func (suite *KeeperTestSuite) TestMsgTransferIBCV2() {
+	var msg *types.MsgTransfer
+	var path *ibctesting.Path
+
+	testCases := []struct {
+		name     string
+		malleate func()
+		expError error
+	}{
+		{
+			"success",
+			func() {
+				msg.Token = ibctesting.TestCoin
+			},
+			nil,
+		},
+		{
+			"bank send enabled for denoms",
+			func() {
+				err := suite.chainA.GetSimApp().BankKeeper.SetParams(suite.chainA.GetContext(),
+					banktypes.Params{
+						SendEnabled: []*banktypes.SendEnabled{
+							{Denom: sdk.DefaultBondDenom, Enabled: true},
+							{Denom: ibctesting.SecondaryDenom, Enabled: true},
+						},
+					},
+				)
+				suite.Require().NoError(err)
+			},
+			nil,
+		},
+		{
+			"failure: send transfers disabled",
+			func() {
+				suite.chainA.GetSimApp().TransferKeeper.SetParams(suite.chainA.GetContext(),
+					types.Params{
+						SendEnabled: false,
+					},
+				)
+			},
+			types.ErrSendDisabled,
+		},
+		{
+			"failure: invalid sender",
+			func() {
+				msg.Sender = "address"
+			},
+			errors.New("decoding bech32 failed"),
+		},
+		{
+			"failure: sender is a blocked address",
+			func() {
+				msg.Sender = suite.chainA.GetSimApp().AccountKeeper.GetModuleAddress(minttypes.ModuleName).String()
+			},
+			ibcerrors.ErrUnauthorized,
+		},
+		{
+			"failure: bank send disabled",
+			func() {
+				err := suite.chainA.GetSimApp().BankKeeper.SetParams(suite.chainA.GetContext(),
+					banktypes.Params{
+						SendEnabled: []*banktypes.SendEnabled{{Denom: sdk.DefaultBondDenom, Enabled: false}},
+					},
+				)
+				suite.Require().NoError(err)
+			},
+			types.ErrSendDisabled,
+		},
+		{
+			"failure: client does not exist",
+			func() {
+				msg.SourceChannel = "07-tendermint-500"
+			},
+			clienttypesv2.ErrCounterpartyNotFound,
+		},
+	}
+
+	for _, tc := range testCases {
+		tc := tc
+
+		suite.Run(tc.name, func() {
+			suite.SetupTest()
+
+			path = ibctesting.NewPath(suite.chainA, suite.chainB)
+			path.SetupV2()
+
+			timeoutTimestamp := uint64(suite.chainA.GetContext().BlockTime().Add(time.Hour).Unix())
+
+			msg = types.NewMsgTransfer(
+				types.PortID,
+				path.EndpointA.ClientID, // use eureka client id
+				ibctesting.TestCoin,
+				suite.chainA.SenderAccount.GetAddress().String(),
+				suite.chainB.SenderAccount.GetAddress().String(),
+				clienttypes.Height{}, timeoutTimestamp, // only use timeout timestamp
+				"memo",
+			)
+
+			// send some coins of the second denom from bank module to the sender account as well
+			err := suite.chainA.GetSimApp().BankKeeper.MintCoins(suite.chainA.GetContext(), types.ModuleName, sdk.NewCoins(ibctesting.SecondaryTestCoin))
+			suite.Require().NoError(err)
+			err = suite.chainA.GetSimApp().BankKeeper.SendCoinsFromModuleToAccount(suite.chainA.GetContext(), types.ModuleName, suite.chainA.SenderAccount.GetAddress(), sdk.NewCoins(ibctesting.SecondaryTestCoin))
+			suite.Require().NoError(err)
+
+			tc.malleate()
+
+			ctx := suite.chainA.GetContext()
+
+			token, err := suite.chainA.GetSimApp().TransferKeeper.TokenFromCoin(ctx, msg.Token)
+			suite.Require().NoError(err)
+
+			res, err := suite.chainA.GetSimApp().TransferKeeper.Transfer(ctx, msg)
+
+			// Verify events
+			var expEvents []abci.Event
+			events := ctx.EventManager().Events().ToABCIEvents()
+
+			expEvents = sdk.Events{
+				sdk.NewEvent(types.EventTypeTransfer,
+					sdk.NewAttribute(types.AttributeKeySender, msg.Sender),
+					sdk.NewAttribute(types.AttributeKeyReceiver, msg.Receiver),
+					sdk.NewAttribute(types.AttributeKeyDenom, token.Denom.Path()),
+					sdk.NewAttribute(types.AttributeKeyAmount, msg.Token.Amount.String()),
+					sdk.NewAttribute(types.AttributeKeyMemo, msg.Memo),
+				),
+				sdk.NewEvent(
+					sdk.EventTypeMessage,
+					sdk.NewAttribute(sdk.AttributeKeyModule, types.ModuleName),
+				),
+			}.ToABCIEvents()
+
+			if tc.expError == nil {
+				suite.Require().NoError(err)
+				suite.Require().NotNil(res)
+				suite.Require().NotEqual(res.Sequence, uint64(0))
+				ibctesting.AssertEvents(&suite.Suite, expEvents, events)
+			} else {
+				suite.Require().Nil(res)
+				suite.Require().True(errors.Is(err, tc.expError) || strings.Contains(err.Error(), tc.expError.Error()), err.Error())
+			}
+		})
+	}
+}
+
 // TestUpdateParams tests UpdateParams rpc handler
 func (suite *KeeperTestSuite) TestUpdateParams() {
 	signer := suite.chainA.GetSimApp().TransferKeeper.GetAuthority()
diff --git a/modules/apps/transfer/keeper/relay_test.go b/modules/apps/transfer/keeper/relay_test.go
index 2d4531b55d6..9cad6e1585d 100644
--- a/modules/apps/transfer/keeper/relay_test.go
+++ b/modules/apps/transfer/keeper/relay_test.go
@@ -147,14 +147,6 @@ func (suite *KeeperTestSuite) TestSendTransfer() {
 			},
 			types.ErrInvalidAmount,
 		},
-		{
-			"failure: source channel not found",
-			func() {
-				// channel references wrong ID
-				path.EndpointA.ChannelID = ibctesting.InvalidID
-			},
-			channeltypes.ErrChannelNotFound,
-		},
 		{
 			"failure: sender account is blocked",
 			func() {
diff --git a/modules/apps/transfer/types/expected_keepers.go b/modules/apps/transfer/types/expected_keepers.go
index ce17aca840b..73077c6fc05 100644
--- a/modules/apps/transfer/types/expected_keepers.go
+++ b/modules/apps/transfer/types/expected_keepers.go
@@ -7,9 +7,10 @@ import (
 	banktypes "github.com/cosmos/cosmos-sdk/x/bank/types"
 	paramtypes "github.com/cosmos/cosmos-sdk/x/params/types"
 
+	clienttypesv2 "github.com/cosmos/ibc-go/v10/modules/core/02-client/v2/types"
 	connectiontypes "github.com/cosmos/ibc-go/v10/modules/core/03-connection/types"
 	channeltypes "github.com/cosmos/ibc-go/v10/modules/core/04-channel/types"
-	ibcexported "github.com/cosmos/ibc-go/v10/modules/core/exported"
+	channeltypesv2 "github.com/cosmos/ibc-go/v10/modules/core/04-channel/v2/types"
 )
 
 // AccountKeeper defines the contract required for account APIs.
@@ -41,9 +42,14 @@ type ChannelKeeper interface {
 	HasChannel(ctx sdk.Context, portID, channelID string) bool
 }
 
+// ChannelKeeperV2 defines the expected IBC channelV2 keeper
+type ChannelKeeperV2 interface {
+	SendPacket(ctx context.Context, msg *channeltypesv2.MsgSendPacket) (*channeltypesv2.MsgSendPacketResponse, error)
+}
+
 // ClientKeeper defines the expected IBC client keeper
-type ClientKeeper interface {
-	GetClientConsensusState(ctx sdk.Context, clientID string) (connection ibcexported.ConsensusState, found bool)
+type ClientKeeperV2 interface {
+	GetClientCounterparty(ctx sdk.Context, clientID string) (counterparty clienttypesv2.CounterpartyInfo, found bool)
 }
 
 // ConnectionKeeper defines the expected IBC connection keeper
diff --git a/modules/apps/transfer/types/msgs.go b/modules/apps/transfer/types/msgs.go
index fe4f61913b3..bd9bf3c2dc5 100644
--- a/modules/apps/transfer/types/msgs.go
+++ b/modules/apps/transfer/types/msgs.go
@@ -61,6 +61,27 @@ func NewMsgTransfer(
 	}
 }
 
+// NewMsgTransferWithEncoding creates a new MsgTransfer instance
+// with the provided encoding
+func NewMsgTransferWithEncoding(
+	sourcePort, sourceChannel string,
+	token sdk.Coin, sender, receiver string,
+	timeoutHeight clienttypes.Height, timeoutTimestamp uint64,
+	memo string, encoding string,
+) *MsgTransfer {
+	return &MsgTransfer{
+		SourcePort:       sourcePort,
+		SourceChannel:    sourceChannel,
+		Token:            token,
+		Sender:           sender,
+		Receiver:         receiver,
+		TimeoutHeight:    timeoutHeight,
+		TimeoutTimestamp: timeoutTimestamp,
+		Memo:             memo,
+		Encoding:         encoding,
+	}
+}
+
 // ValidateBasic performs a basic check of the MsgTransfer fields.
 // NOTE: timeout height or timestamp values can be 0 to disable the timeout.
 // NOTE: The recipient addresses format is not validated as the format defined by
diff --git a/modules/apps/transfer/types/msgs_test.go b/modules/apps/transfer/types/msgs_test.go
index a821d8f8af3..ef35aab1992 100644
--- a/modules/apps/transfer/types/msgs_test.go
+++ b/modules/apps/transfer/types/msgs_test.go
@@ -28,6 +28,7 @@ const (
 	invalidLongPort = "Lorem ipsum dolor sit amet, consectetur adipiscing elit. Duis eros neque, ultricies vel ligula ac, convallis porttitor elit. Maecenas tincidunt turpis elit, vel faucibus nisl pellentesque sodales"
 
 	validChannel        = "testchannel"
+	eurekaClient        = "07-tendermint-0"
 	invalidChannel      = "(invalidchannel1)"
 	invalidShortChannel = "invalid"
 	invalidLongChannel  = "invalidlongchannelinvalidlongchannelinvalidlongchannelinvalidlongchannel"
@@ -57,7 +58,11 @@ func TestMsgTransferValidation(t *testing.T) {
 		expError error
 	}{
 		{"valid msg with base denom", types.NewMsgTransfer(validPort, validChannel, coin, sender, receiver, clienttypes.ZeroHeight(), 100, ""), nil},
+		{"valid eureka msg with base denom", types.NewMsgTransfer(validPort, eurekaClient, coin, sender, receiver, clienttypes.ZeroHeight(), 100, ""), nil},
+		{"valid eureka msg with base denom and encoding", types.NewMsgTransferWithEncoding(validPort, eurekaClient, coin, sender, receiver, clienttypes.ZeroHeight(), 100, "", "application/json"), nil},
 		{"valid msg with trace hash", types.NewMsgTransfer(validPort, validChannel, ibcCoin, sender, receiver, clienttypes.ZeroHeight(), 100, ""), nil},
+		{"valid eureka msg with trace hash", types.NewMsgTransfer(validPort, eurekaClient, ibcCoin, sender, receiver, clienttypes.ZeroHeight(), 100, ""), nil},
+		{"valid eureka msg with trace hash with encoding", types.NewMsgTransferWithEncoding(validPort, eurekaClient, ibcCoin, sender, receiver, clienttypes.ZeroHeight(), 100, "", "application/json"), nil},
 		{"invalid ibc denom", types.NewMsgTransfer(validPort, validChannel, invalidIBCCoin, sender, receiver, clienttypes.ZeroHeight(), 100, ""), ibcerrors.ErrInvalidCoins},
 		{"too short port id", types.NewMsgTransfer(invalidShortPort, validChannel, coin, sender, receiver, clienttypes.ZeroHeight(), 100, ""), host.ErrInvalidID},
 		{"too long port id", types.NewMsgTransfer(invalidLongPort, validChannel, coin, sender, receiver, clienttypes.ZeroHeight(), 100, ""), host.ErrInvalidID},
diff --git a/modules/apps/transfer/types/packet.go b/modules/apps/transfer/types/packet.go
index fa195912622..49eb79ac565 100644
--- a/modules/apps/transfer/types/packet.go
+++ b/modules/apps/transfer/types/packet.go
@@ -189,6 +189,24 @@ func (ftpd FungibleTokenPacketDataV2) GetPacketSender(sourcePortID string) strin
 	return ftpd.Sender
 }
 
+// MarshalPacketData attempts to marshal the provided FungibleTokenPacketData into bytes with the provided encoding.
+func MarshalPacketData(data FungibleTokenPacketData, ics20Version string, encoding string) ([]byte, error) {
+	if ics20Version != V1 {
+		panic("unsupported ics20 version")
+	}
+
+	switch encoding {
+	case EncodingJSON:
+		return json.Marshal(data)
+	case EncodingProtobuf:
+		return proto.Marshal(&data)
+	case EncodingABI:
+		return EncodeABIFungibleTokenPacketData(&data)
+	default:
+		return nil, errorsmod.Wrapf(ibcerrors.ErrInvalidType, "invalid encoding provided, must be either empty or one of [%q, %q], got %s", EncodingJSON, EncodingProtobuf, encoding)
+	}
+}
+
 // UnmarshalPacketData attempts to unmarshal the provided packet data bytes into a FungibleTokenPacketDataV2.
 func UnmarshalPacketData(bz []byte, ics20Version string, encoding string) (FungibleTokenPacketDataV2, error) {
 	const failedUnmarshalingErrorMsg = "cannot unmarshal %s transfer packet data: %s"
diff --git a/modules/apps/transfer/types/packet_test.go b/modules/apps/transfer/types/packet_test.go
index 315530bc3ed..603199a90ff 100644
--- a/modules/apps/transfer/types/packet_test.go
+++ b/modules/apps/transfer/types/packet_test.go
@@ -5,7 +5,6 @@ import (
 	"fmt"
 	"testing"
 
-	"github.com/cosmos/gogoproto/proto"
 	"github.com/stretchr/testify/require"
 
 	errorsmod "cosmossdk.io/errors"
@@ -543,7 +542,11 @@ func TestUnmarshalPacketData(t *testing.T) {
 		{
 			"success: v1 -> v2 with JSON encoding",
 			func() {
+				packetDataV1 := types.NewFungibleTokenPacketData("transfer/channel-0/atom", "1000", sender, receiver, "")
 				encoding = types.EncodingJSON
+				bz, err := types.MarshalPacketData(packetDataV1, types.V1, encoding)
+				require.NoError(t, err)
+				packetDataBz = bz
 			},
 			nil,
 		},
@@ -551,7 +554,7 @@ func TestUnmarshalPacketData(t *testing.T) {
 			"success: v1 -> v2 with protobuf encoding",
 			func() {
 				packetData := types.NewFungibleTokenPacketData("transfer/channel-0/atom", "1000", sender, receiver, "")
-				bz, err := proto.Marshal(&packetData)
+				bz, err := types.MarshalPacketData(packetData, types.V1, types.EncodingProtobuf)
 				require.NoError(t, err)
 
 				packetDataBz = bz
@@ -563,7 +566,7 @@ func TestUnmarshalPacketData(t *testing.T) {
 			"success: v1 -> v2 with abi encoding",
 			func() {
 				packetData := types.NewFungibleTokenPacketData("transfer/channel-0/atom", "1000", sender, receiver, "")
-				bz, err := types.EncodeABIFungibleTokenPacketData(&packetData)
+				bz, err := types.MarshalPacketData(packetData, types.V1, types.EncodingABI)
 				require.NoError(t, err)
 
 				packetDataBz = bz
diff --git a/modules/apps/transfer/types/tx.pb.go b/modules/apps/transfer/types/tx.pb.go
index fd7992cedff..7d5da5e7b14 100644
--- a/modules/apps/transfer/types/tx.pb.go
+++ b/modules/apps/transfer/types/tx.pb.go
@@ -54,6 +54,8 @@ type MsgTransfer struct {
 	TimeoutTimestamp uint64 `protobuf:"varint,7,opt,name=timeout_timestamp,json=timeoutTimestamp,proto3" json:"timeout_timestamp,omitempty"`
 	// optional memo
 	Memo string `protobuf:"bytes,8,opt,name=memo,proto3" json:"memo,omitempty"`
+	// optional encoding
+	Encoding string `protobuf:"bytes,9,opt,name=encoding,proto3" json:"encoding,omitempty"`
 }
 
 func (m *MsgTransfer) Reset()         { *m = MsgTransfer{} }
@@ -221,46 +223,47 @@ func init() {
 }
 
 var fileDescriptor_7401ed9bed2f8e09 = []byte{
-	// 612 bytes of a gzipped FileDescriptorProto
-	0x1f, 0x8b, 0x08, 0x00, 0x00, 0x00, 0x00, 0x00, 0x02, 0xff, 0x94, 0x53, 0x3f, 0x6f, 0xd3, 0x40,
-	0x14, 0x8f, 0x69, 0x1a, 0xda, 0x0b, 0x6d, 0xa9, 0x41, 0xad, 0x6b, 0x21, 0xa7, 0x8a, 0xa8, 0x54,
-	0x52, 0xf5, 0x0e, 0x17, 0x21, 0x50, 0xc6, 0x74, 0x61, 0xa0, 0x52, 0x65, 0x95, 0x85, 0xa5, 0xb2,
-	0x2f, 0x0f, 0xe7, 0xd4, 0xf8, 0xce, 0xf8, 0x2e, 0x11, 0x2c, 0xa8, 0x62, 0x42, 0x4c, 0x7c, 0x04,
-	0x46, 0xc6, 0x7e, 0x8c, 0x8e, 0x1d, 0x99, 0x10, 0x6a, 0x87, 0x2e, 0x7c, 0x08, 0x74, 0xe7, 0x4b,
-	0x30, 0x0c, 0x01, 0x16, 0xfb, 0xfd, 0xf9, 0xbd, 0x7f, 0xbf, 0x77, 0x0f, 0x6d, 0xb1, 0x84, 0x92,
-	0x38, 0xcf, 0x87, 0x8c, 0xc6, 0x8a, 0x09, 0x2e, 0x89, 0x2a, 0x62, 0x2e, 0x5f, 0x41, 0x41, 0xc6,
-	0x21, 0x51, 0x6f, 0x70, 0x5e, 0x08, 0x25, 0xdc, 0x7b, 0x2c, 0xa1, 0xb8, 0x0a, 0xc3, 0x13, 0x18,
-	0x1e, 0x87, 0xfe, 0x6a, 0x9c, 0x31, 0x2e, 0x88, 0xf9, 0x96, 0x01, 0xfe, 0xdd, 0x54, 0xa4, 0xc2,
-	0x88, 0x44, 0x4b, 0xd6, 0xba, 0x4e, 0x85, 0xcc, 0x84, 0x24, 0x99, 0x4c, 0x75, 0xfa, 0x4c, 0xa6,
-	0xd6, 0x11, 0x58, 0x47, 0x12, 0x4b, 0x20, 0xe3, 0x30, 0x01, 0x15, 0x87, 0x84, 0x0a, 0xc6, 0xad,
-	0xbf, 0xa5, 0xdb, 0xa4, 0xa2, 0x00, 0x42, 0x87, 0x0c, 0xb8, 0xd2, 0xd1, 0xa5, 0x64, 0x01, 0x3b,
-	0xb3, 0xe7, 0x98, 0x34, 0x6b, 0xc0, 0xed, 0xd3, 0x39, 0xd4, 0x3c, 0x90, 0xe9, 0x91, 0xb5, 0xba,
-	0x2d, 0xd4, 0x94, 0x62, 0x54, 0x50, 0x38, 0xce, 0x45, 0xa1, 0x3c, 0x67, 0xd3, 0xd9, 0x5e, 0x8c,
-	0x50, 0x69, 0x3a, 0x14, 0x85, 0x72, 0xb7, 0xd0, 0xb2, 0x05, 0xd0, 0x41, 0xcc, 0x39, 0x0c, 0xbd,
-	0x1b, 0x06, 0xb3, 0x54, 0x5a, 0xf7, 0x4b, 0xa3, 0xdb, 0x45, 0xf3, 0x4a, 0x9c, 0x00, 0xf7, 0xe6,
-	0x36, 0x9d, 0xed, 0xe6, 0xde, 0x06, 0x2e, 0xa7, 0xc2, 0x7a, 0x2a, 0x6c, 0xa7, 0xc2, 0xfb, 0x82,
-	0xf1, 0xde, 0xe2, 0xf9, 0xb7, 0x56, 0xed, 0xcb, 0xf5, 0x59, 0xc7, 0x89, 0xca, 0x10, 0x77, 0x0d,
-	0x35, 0x24, 0xf0, 0x3e, 0x14, 0x5e, 0xdd, 0xa4, 0xb6, 0x9a, 0xeb, 0xa3, 0x85, 0x02, 0x28, 0xb0,
-	0x31, 0x14, 0xde, 0xbc, 0xf1, 0x4c, 0x75, 0xf7, 0x39, 0x5a, 0x56, 0x2c, 0x03, 0x31, 0x52, 0xc7,
-	0x03, 0x60, 0xe9, 0x40, 0x79, 0x0d, 0x53, 0xd8, 0xc7, 0x7a, 0x5d, 0x9a, 0x2e, 0x6c, 0x49, 0x1a,
-	0x87, 0xf8, 0x99, 0x41, 0x54, 0x2b, 0x2f, 0xd9, 0xe0, 0xd2, 0xe3, 0xee, 0xa0, 0xd5, 0x49, 0x36,
-	0xfd, 0x97, 0x2a, 0xce, 0x72, 0xef, 0xe6, 0xa6, 0xb3, 0x5d, 0x8f, 0x6e, 0x5b, 0xc7, 0xd1, 0xc4,
-	0xee, 0xba, 0xa8, 0x9e, 0x41, 0x26, 0xbc, 0x05, 0xd3, 0x92, 0x91, 0xbb, 0x9d, 0x0f, 0x9f, 0x5b,
-	0xb5, 0xf7, 0xd7, 0x67, 0x1d, 0xdb, 0xfb, 0xc7, 0xeb, 0xb3, 0xce, 0x5a, 0x49, 0xc1, 0xae, 0xec,
-	0x9f, 0x90, 0x0a, 0xe5, 0xed, 0x27, 0xe8, 0x4e, 0x45, 0x8d, 0x40, 0xe6, 0x82, 0x4b, 0xd0, 0xd3,
-	0x4a, 0x78, 0x3d, 0x02, 0x4e, 0xc1, 0xac, 0xa1, 0x1e, 0x4d, 0xf5, 0x6e, 0x5d, 0xa7, 0x6f, 0xbf,
-	0x43, 0x2b, 0x07, 0x32, 0x7d, 0x91, 0xf7, 0x63, 0x05, 0x87, 0x71, 0x11, 0x67, 0xd2, 0x50, 0xc7,
-	0x52, 0x0e, 0x85, 0xdd, 0x9c, 0xd5, 0xdc, 0x1e, 0x6a, 0xe4, 0x06, 0x61, 0xb6, 0xd5, 0xdc, 0xbb,
-	0x8f, 0x67, 0xbd, 0x62, 0x5c, 0x66, 0xeb, 0xd5, 0x35, 0x41, 0x91, 0x8d, 0xec, 0xae, 0xfc, 0x9a,
-	0xc9, 0x24, 0x6d, 0x6f, 0xa0, 0xf5, 0x3f, 0xea, 0x4f, 0x9a, 0xdf, 0xfb, 0xe1, 0xa0, 0xb9, 0x03,
-	0x99, 0xba, 0x03, 0xb4, 0x30, 0x7d, 0x5a, 0x0f, 0x66, 0xd7, 0xac, 0x70, 0xe0, 0x87, 0xff, 0x0c,
-	0x9d, 0xd2, 0xa5, 0xd0, 0xad, 0xdf, 0x98, 0xd8, 0xfd, 0x6b, 0x8a, 0x2a, 0xdc, 0x7f, 0xfc, 0x5f,
-	0xf0, 0x49, 0x55, 0x7f, 0xfe, 0x54, 0x3f, 0x9f, 0x5e, 0x74, 0x7e, 0x19, 0x38, 0x17, 0x97, 0x81,
-	0xf3, 0xfd, 0x32, 0x70, 0x3e, 0x5d, 0x05, 0xb5, 0x8b, 0xab, 0xa0, 0xf6, 0xf5, 0x2a, 0xa8, 0xbd,
-	0x7c, 0x9a, 0x32, 0x35, 0x18, 0x25, 0x98, 0x8a, 0x8c, 0xd8, 0xc3, 0x66, 0x09, 0xdd, 0x4d, 0x05,
-	0x19, 0x87, 0x0f, 0x49, 0x26, 0xfa, 0xa3, 0x21, 0x48, 0x7d, 0xad, 0x95, 0x2b, 0x55, 0x6f, 0x73,
-	0x90, 0x49, 0xc3, 0x1c, 0xe8, 0xa3, 0x9f, 0x01, 0x00, 0x00, 0xff, 0xff, 0x35, 0xce, 0x82, 0x0b,
-	0x97, 0x04, 0x00, 0x00,
+	// 629 bytes of a gzipped FileDescriptorProto
+	0x1f, 0x8b, 0x08, 0x00, 0x00, 0x00, 0x00, 0x00, 0x02, 0xff, 0x94, 0x53, 0x31, 0x6f, 0xd4, 0x4a,
+	0x10, 0x3e, 0xbf, 0x5c, 0xee, 0x25, 0x7b, 0x2f, 0xc9, 0x8b, 0x41, 0x89, 0x63, 0x21, 0x5f, 0x74,
+	0x22, 0x52, 0xb8, 0x28, 0xbb, 0x38, 0x08, 0x81, 0xae, 0xbc, 0x34, 0x14, 0x44, 0x8a, 0xac, 0xd0,
+	0xd0, 0x44, 0xf6, 0xde, 0xe0, 0x5b, 0xe5, 0xbc, 0x6b, 0xbc, 0x7b, 0x27, 0x68, 0x10, 0xa2, 0x42,
+	0x54, 0xfc, 0x00, 0x0a, 0x4a, 0xca, 0xfc, 0x8c, 0x94, 0x29, 0xa9, 0x10, 0x4a, 0x8a, 0x34, 0xfc,
+	0x08, 0xb4, 0xeb, 0xf5, 0x61, 0x28, 0x02, 0x34, 0xf6, 0xce, 0xcc, 0x37, 0xdf, 0xcc, 0x7c, 0xb3,
+	0x8b, 0xb6, 0x58, 0x42, 0x49, 0x9c, 0xe7, 0x63, 0x46, 0x63, 0xc5, 0x04, 0x97, 0x44, 0x15, 0x31,
+	0x97, 0xcf, 0xa0, 0x20, 0xd3, 0x90, 0xa8, 0x17, 0x38, 0x2f, 0x84, 0x12, 0xee, 0x2d, 0x96, 0x50,
+	0x5c, 0x87, 0xe1, 0x0a, 0x86, 0xa7, 0xa1, 0xbf, 0x1a, 0x67, 0x8c, 0x0b, 0x62, 0xbe, 0x65, 0x82,
+	0x7f, 0x33, 0x15, 0xa9, 0x30, 0x47, 0xa2, 0x4f, 0xd6, 0xbb, 0x4e, 0x85, 0xcc, 0x84, 0x24, 0x99,
+	0x4c, 0x35, 0x7d, 0x26, 0x53, 0x1b, 0x08, 0x6c, 0x20, 0x89, 0x25, 0x90, 0x69, 0x98, 0x80, 0x8a,
+	0x43, 0x42, 0x05, 0xe3, 0x36, 0xde, 0xd1, 0x6d, 0x52, 0x51, 0x00, 0xa1, 0x63, 0x06, 0x5c, 0xe9,
+	0xec, 0xf2, 0x64, 0x01, 0x3b, 0xd7, 0xcf, 0x51, 0x35, 0x6b, 0xc0, 0xdd, 0x0f, 0x73, 0xa8, 0x7d,
+	0x20, 0xd3, 0x23, 0xeb, 0x75, 0x3b, 0xa8, 0x2d, 0xc5, 0xa4, 0xa0, 0x70, 0x9c, 0x8b, 0x42, 0x79,
+	0xce, 0xa6, 0xb3, 0xbd, 0x18, 0xa1, 0xd2, 0x75, 0x28, 0x0a, 0xe5, 0x6e, 0xa1, 0x65, 0x0b, 0xa0,
+	0xa3, 0x98, 0x73, 0x18, 0x7b, 0xff, 0x18, 0xcc, 0x52, 0xe9, 0xdd, 0x2f, 0x9d, 0x6e, 0x1f, 0xcd,
+	0x2b, 0x71, 0x02, 0xdc, 0x9b, 0xdb, 0x74, 0xb6, 0xdb, 0x7b, 0x1b, 0xb8, 0x9c, 0x0a, 0xeb, 0xa9,
+	0xb0, 0x9d, 0x0a, 0xef, 0x0b, 0xc6, 0x07, 0x8b, 0x67, 0x5f, 0x3a, 0x8d, 0x4f, 0x57, 0xa7, 0x3d,
+	0x27, 0x2a, 0x53, 0xdc, 0x35, 0xd4, 0x92, 0xc0, 0x87, 0x50, 0x78, 0x4d, 0x43, 0x6d, 0x2d, 0xd7,
+	0x47, 0x0b, 0x05, 0x50, 0x60, 0x53, 0x28, 0xbc, 0x79, 0x13, 0x99, 0xd9, 0xee, 0x63, 0xb4, 0xac,
+	0x58, 0x06, 0x62, 0xa2, 0x8e, 0x47, 0xc0, 0xd2, 0x91, 0xf2, 0x5a, 0xa6, 0xb0, 0x8f, 0xf5, 0xba,
+	0xb4, 0x5c, 0xd8, 0x8a, 0x34, 0x0d, 0xf1, 0x23, 0x83, 0xa8, 0x57, 0x5e, 0xb2, 0xc9, 0x65, 0xc4,
+	0xdd, 0x41, 0xab, 0x15, 0x9b, 0xfe, 0x4b, 0x15, 0x67, 0xb9, 0xf7, 0xef, 0xa6, 0xb3, 0xdd, 0x8c,
+	0xfe, 0xb7, 0x81, 0xa3, 0xca, 0xef, 0xba, 0xa8, 0x99, 0x41, 0x26, 0xbc, 0x05, 0xd3, 0x92, 0x39,
+	0xeb, 0x56, 0x81, 0x53, 0x31, 0x64, 0x3c, 0xf5, 0x16, 0xcb, 0x56, 0x2b, 0xbb, 0xdf, 0x7b, 0xfb,
+	0xb1, 0xd3, 0x78, 0x73, 0x75, 0xda, 0xb3, 0x73, 0xbd, 0xbb, 0x3a, 0xed, 0xad, 0x95, 0xf2, 0xec,
+	0xca, 0xe1, 0x09, 0xa9, 0xad, 0xa3, 0xfb, 0x00, 0xdd, 0xa8, 0x99, 0x11, 0xc8, 0x5c, 0x70, 0x09,
+	0x9a, 0x5e, 0xc2, 0xf3, 0x09, 0x70, 0x0a, 0x66, 0x45, 0xcd, 0x68, 0x66, 0xf7, 0x9b, 0x9a, 0xbe,
+	0xfb, 0x0a, 0xad, 0x1c, 0xc8, 0xf4, 0x49, 0x3e, 0x8c, 0x15, 0x1c, 0xc6, 0x45, 0x9c, 0x49, 0x23,
+	0x2b, 0x4b, 0x39, 0x14, 0x76, 0xab, 0xd6, 0x72, 0x07, 0xa8, 0x95, 0x1b, 0x84, 0xd9, 0x64, 0x7b,
+	0xef, 0x36, 0xbe, 0xee, 0x86, 0xe3, 0x92, 0x6d, 0xd0, 0xd4, 0xe2, 0x45, 0x36, 0xb3, 0xbf, 0xf2,
+	0x63, 0x26, 0x43, 0xda, 0xdd, 0x40, 0xeb, 0xbf, 0xd4, 0xaf, 0x9a, 0xdf, 0xfb, 0xe6, 0xa0, 0xb9,
+	0x03, 0x99, 0xba, 0x23, 0xb4, 0x30, 0xbb, 0x76, 0x77, 0xae, 0xaf, 0x59, 0xd3, 0xc0, 0x0f, 0xff,
+	0x18, 0x3a, 0x93, 0x4b, 0xa1, 0xff, 0x7e, 0x52, 0x62, 0xf7, 0xb7, 0x14, 0x75, 0xb8, 0x7f, 0xff,
+	0xaf, 0xe0, 0x55, 0x55, 0x7f, 0xfe, 0xb5, 0xbe, 0x5a, 0x83, 0xe8, 0xec, 0x22, 0x70, 0xce, 0x2f,
+	0x02, 0xe7, 0xeb, 0x45, 0xe0, 0xbc, 0xbf, 0x0c, 0x1a, 0xe7, 0x97, 0x41, 0xe3, 0xf3, 0x65, 0xd0,
+	0x78, 0xfa, 0x30, 0x65, 0x6a, 0x34, 0x49, 0x30, 0x15, 0x19, 0xb1, 0x8f, 0x9e, 0x25, 0x74, 0x37,
+	0x15, 0x64, 0x1a, 0xde, 0x25, 0x99, 0x18, 0x4e, 0xc6, 0x20, 0xf5, 0x4b, 0xae, 0xbd, 0x60, 0xf5,
+	0x32, 0x07, 0x99, 0xb4, 0xcc, 0xe3, 0xbd, 0xf7, 0x3d, 0x00, 0x00, 0xff, 0xff, 0xc9, 0x87, 0xc2,
+	0x5c, 0xb3, 0x04, 0x00, 0x00,
 }
 
 // Reference imports to suppress errors if they are not otherwise used.
@@ -403,6 +406,13 @@ func (m *MsgTransfer) MarshalToSizedBuffer(dAtA []byte) (int, error) {
 	_ = i
 	var l int
 	_ = l
+	if len(m.Encoding) > 0 {
+		i -= len(m.Encoding)
+		copy(dAtA[i:], m.Encoding)
+		i = encodeVarintTx(dAtA, i, uint64(len(m.Encoding)))
+		i--
+		dAtA[i] = 0x4a
+	}
 	if len(m.Memo) > 0 {
 		i -= len(m.Memo)
 		copy(dAtA[i:], m.Memo)
@@ -601,6 +611,10 @@ func (m *MsgTransfer) Size() (n int) {
 	if l > 0 {
 		n += 1 + l + sovTx(uint64(l))
 	}
+	l = len(m.Encoding)
+	if l > 0 {
+		n += 1 + l + sovTx(uint64(l))
+	}
 	return n
 }
 
@@ -920,6 +934,38 @@ func (m *MsgTransfer) Unmarshal(dAtA []byte) error {
 			}
 			m.Memo = string(dAtA[iNdEx:postIndex])
 			iNdEx = postIndex
+		case 9:
+			if wireType != 2 {
+				return fmt.Errorf("proto: wrong wireType = %d for field Encoding", wireType)
+			}
+			var stringLen uint64
+			for shift := uint(0); ; shift += 7 {
+				if shift >= 64 {
+					return ErrIntOverflowTx
+				}
+				if iNdEx >= l {
+					return io.ErrUnexpectedEOF
+				}
+				b := dAtA[iNdEx]
+				iNdEx++
+				stringLen |= uint64(b&0x7F) << shift
+				if b < 0x80 {
+					break
+				}
+			}
+			intStringLen := int(stringLen)
+			if intStringLen < 0 {
+				return ErrInvalidLengthTx
+			}
+			postIndex := iNdEx + intStringLen
+			if postIndex < 0 {
+				return ErrInvalidLengthTx
+			}
+			if postIndex > l {
+				return io.ErrUnexpectedEOF
+			}
+			m.Encoding = string(dAtA[iNdEx:postIndex])
+			iNdEx = postIndex
 		default:
 			iNdEx = preIndex
 			skippy, err := skipTx(dAtA[iNdEx:])
diff --git a/modules/apps/transfer/v2/ibc_module_test.go b/modules/apps/transfer/v2/ibc_module_test.go
index 081df30683a..1563f72dd75 100644
--- a/modules/apps/transfer/v2/ibc_module_test.go
+++ b/modules/apps/transfer/v2/ibc_module_test.go
@@ -13,6 +13,7 @@ import (
 	sdk "github.com/cosmos/cosmos-sdk/types"
 
 	"github.com/cosmos/ibc-go/v10/modules/apps/transfer/types"
+	clienttypes "github.com/cosmos/ibc-go/v10/modules/core/02-client/types"
 	channeltypes "github.com/cosmos/ibc-go/v10/modules/core/04-channel/types"
 	channeltypesv2 "github.com/cosmos/ibc-go/v10/modules/core/04-channel/v2/types"
 	ibctesting "github.com/cosmos/ibc-go/v10/testing"
@@ -202,6 +203,15 @@ func (suite *TransferTestSuite) TestOnRecvPacket() {
 			suite.Require().True(ok)
 			originalCoin := sdk.NewCoin(tc.sourceDenomToTransfer, amount)
 
+			msg := types.NewMsgTransferWithEncoding(
+				types.PortID, suite.pathAToB.EndpointA.ClientID,
+				originalCoin, suite.chainA.SenderAccount.GetAddress().String(),
+				suite.chainB.SenderAccount.GetAddress().String(), clienttypes.Height{},
+				timeoutTimestamp, "", types.EncodingProtobuf,
+			)
+			_, err := suite.chainA.SendMsgs(msg)
+			suite.Require().NoError(err) // message committed
+
 			token, err := suite.chainA.GetSimApp().TransferKeeper.TokenFromCoin(suite.chainA.GetContext(), originalCoin)
 			suite.Require().NoError(err)
 
@@ -217,15 +227,6 @@ func (suite *TransferTestSuite) TestOnRecvPacket() {
 				types.PortID, types.PortID, types.V1,
 				types.EncodingProtobuf, bz,
 			)
-			msg := channeltypesv2.NewMsgSendPacket(
-				suite.pathAToB.EndpointA.ClientID,
-				timeoutTimestamp,
-				suite.chainA.SenderAccount.GetAddress().String(),
-				payload,
-			)
-
-			_, err = suite.chainA.SendMsgs(msg)
-			suite.Require().NoError(err) // message committed
 
 			ctx := suite.chainB.GetContext()
 			cbs := suite.chainB.App.GetIBCKeeper().ChannelKeeperV2.Router.Route(ibctesting.TransferPort)
@@ -289,6 +290,15 @@ func (suite *TransferTestSuite) TestOnAckPacket() {
 			suite.Require().True(ok)
 			originalCoin := sdk.NewCoin(tc.sourceDenomToTransfer, amount)
 
+			msg := types.NewMsgTransferWithEncoding(
+				types.PortID, suite.pathAToB.EndpointA.ClientID,
+				originalCoin, suite.chainA.SenderAccount.GetAddress().String(),
+				suite.chainB.SenderAccount.GetAddress().String(), clienttypes.Height{},
+				timeoutTimestamp, "", types.EncodingProtobuf,
+			)
+			_, err := suite.chainA.SendMsgs(msg)
+			suite.Require().NoError(err) // message committed
+
 			token, err := suite.chainA.GetSimApp().TransferKeeper.TokenFromCoin(suite.chainA.GetContext(), originalCoin)
 			suite.Require().NoError(err)
 
@@ -304,15 +314,6 @@ func (suite *TransferTestSuite) TestOnAckPacket() {
 				types.PortID, types.PortID, types.V1,
 				types.EncodingProtobuf, bz,
 			)
-			msg := channeltypesv2.NewMsgSendPacket(
-				suite.pathAToB.EndpointA.ClientID,
-				timeoutTimestamp,
-				suite.chainA.SenderAccount.GetAddress().String(),
-				payload,
-			)
-
-			_, err = suite.chainA.SendMsgs(msg)
-			suite.Require().NoError(err) // message committed
 
 			ctx := suite.chainA.GetContext()
 			cbs := suite.chainA.App.GetIBCKeeper().ChannelKeeperV2.Router.Route(ibctesting.TransferPort)
@@ -386,6 +387,15 @@ func (suite *TransferTestSuite) TestOnTimeoutPacket() {
 			suite.Require().True(ok)
 			originalCoin := sdk.NewCoin(tc.sourceDenomToTransfer, amount)
 
+			msg := types.NewMsgTransferWithEncoding(
+				types.PortID, suite.pathAToB.EndpointA.ClientID,
+				originalCoin, suite.chainA.SenderAccount.GetAddress().String(),
+				suite.chainB.SenderAccount.GetAddress().String(), clienttypes.Height{},
+				timeoutTimestamp, "", types.EncodingProtobuf,
+			)
+			_, err := suite.chainA.SendMsgs(msg)
+			suite.Require().NoError(err) // message committed
+
 			token, err := suite.chainA.GetSimApp().TransferKeeper.TokenFromCoin(suite.chainA.GetContext(), originalCoin)
 			suite.Require().NoError(err)
 
@@ -401,15 +411,6 @@ func (suite *TransferTestSuite) TestOnTimeoutPacket() {
 				types.PortID, types.PortID, types.V1,
 				types.EncodingProtobuf, bz,
 			)
-			msg := channeltypesv2.NewMsgSendPacket(
-				suite.pathAToB.EndpointA.ClientID,
-				timeoutTimestamp,
-				suite.chainA.SenderAccount.GetAddress().String(),
-				payload,
-			)
-
-			_, err = suite.chainA.SendMsgs(msg)
-			suite.Require().NoError(err) // message committed
 
 			// on successful send, the tokens sent in packets should be in escrow
 			escrowAddress := types.GetEscrowAddress(types.PortID, suite.pathAToB.EndpointA.ClientID)
diff --git a/modules/core/04-channel/v2/keeper/msg_server.go b/modules/core/04-channel/v2/keeper/msg_server.go
index c649278ea95..a16ba23afc7 100644
--- a/modules/core/04-channel/v2/keeper/msg_server.go
+++ b/modules/core/04-channel/v2/keeper/msg_server.go
@@ -3,7 +3,6 @@ package keeper
 import (
 	"bytes"
 	"context"
-	"time"
 
 	errorsmod "cosmossdk.io/errors"
 
@@ -20,18 +19,6 @@ var _ types.MsgServer = &Keeper{}
 func (k *Keeper) SendPacket(goCtx context.Context, msg *types.MsgSendPacket) (*types.MsgSendPacketResponse, error) {
 	ctx := sdk.UnwrapSDKContext(goCtx)
 
-	// Note, the validate basic function in sendPacket does the timeoutTimestamp != 0 check and other stateless checks on the packet.
-	// timeoutTimestamp must be greater than current block time
-	timeout := time.Unix(int64(msg.TimeoutTimestamp), 0)
-	if timeout.Before(ctx.BlockTime()) {
-		return nil, errorsmod.Wrap(types.ErrTimeoutElapsed, "timeout is less than the current block timestamp")
-	}
-
-	// timeoutTimestamp must be less than current block time + MaxTimeoutDelta
-	if timeout.After(ctx.BlockTime().Add(types.MaxTimeoutDelta)) {
-		return nil, errorsmod.Wrap(types.ErrInvalidTimeout, "timeout exceeds the maximum expected value")
-	}
-
 	signer, err := sdk.AccAddressFromBech32(msg.Signer)
 	if err != nil {
 		ctx.Logger().Error("send packet failed", "error", errorsmod.Wrap(err, "invalid address for msg Signer"))
diff --git a/modules/core/04-channel/v2/keeper/packet.go b/modules/core/04-channel/v2/keeper/packet.go
index 8ae57dd7f62..34c10f94f82 100644
--- a/modules/core/04-channel/v2/keeper/packet.go
+++ b/modules/core/04-channel/v2/keeper/packet.go
@@ -30,6 +30,18 @@ func (k *Keeper) sendPacket(
 		return 0, "", errorsmod.Wrapf(clientv2types.ErrCounterpartyNotFound, "counterparty not found for client: %s", sourceClient)
 	}
 
+	// Note, the validate basic function in sendPacket does the timeoutTimestamp != 0 check and other stateless checks on the packet.
+	// timeoutTimestamp must be greater than current block time
+	timeout := time.Unix(int64(timeoutTimestamp), 0)
+	if timeout.Before(ctx.BlockTime()) {
+		return 0, "", errorsmod.Wrap(types.ErrTimeoutElapsed, "timeout is less than the current block timestamp")
+	}
+
+	// timeoutTimestamp must be less than current block time + MaxTimeoutDelta
+	if timeout.After(ctx.BlockTime().Add(types.MaxTimeoutDelta)) {
+		return 0, "", errorsmod.Wrap(types.ErrInvalidTimeout, "timeout exceeds the maximum expected value")
+	}
+
 	sequence, found := k.GetNextSequenceSend(ctx, sourceClient)
 	if !found {
 		return 0, "", errorsmod.Wrapf(types.ErrSequenceSendNotFound, "source client: %s", sourceClient)
diff --git a/modules/light-clients/08-wasm/testing/simapp/app.go b/modules/light-clients/08-wasm/testing/simapp/app.go
index 5f58e3d1f9d..125d3f729b8 100644
--- a/modules/light-clients/08-wasm/testing/simapp/app.go
+++ b/modules/light-clients/08-wasm/testing/simapp/app.go
@@ -488,6 +488,7 @@ func NewSimApp(
 		appCodec, runtime.NewKVStoreService(keys[ibctransfertypes.StoreKey]), app.GetSubspace(ibctransfertypes.ModuleName),
 		app.IBCFeeKeeper, // ISC4 Wrapper: fee IBC middleware
 		app.IBCKeeper.ChannelKeeper,
+		app.IBCKeeper.ChannelKeeperV2,
 		app.AccountKeeper, app.BankKeeper,
 		authtypes.NewModuleAddress(govtypes.ModuleName).String(),
 	)
diff --git a/proto/ibc/applications/transfer/v1/tx.proto b/proto/ibc/applications/transfer/v1/tx.proto
index 8e43d1d86e5..eefeb0bc678 100644
--- a/proto/ibc/applications/transfer/v1/tx.proto
+++ b/proto/ibc/applications/transfer/v1/tx.proto
@@ -49,6 +49,8 @@ message MsgTransfer {
   uint64 timeout_timestamp = 7;
   // optional memo
   string memo = 8;
+  // optional encoding
+  string encoding = 9;
 }
 
 // MsgTransferResponse defines the Msg/Transfer response type.
diff --git a/simapp/app.go b/simapp/app.go
index da8151a9b16..985e29ebe2a 100644
--- a/simapp/app.go
+++ b/simapp/app.go
@@ -410,6 +410,7 @@ func NewSimApp(
 		appCodec, runtime.NewKVStoreService(keys[ibctransfertypes.StoreKey]), app.GetSubspace(ibctransfertypes.ModuleName),
 		app.IBCFeeKeeper, // ISC4 Wrapper: fee IBC middleware
 		app.IBCKeeper.ChannelKeeper,
+		app.IBCKeeper.ChannelKeeperV2,
 		app.AccountKeeper, app.BankKeeper,
 		authtypes.NewModuleAddress(govtypes.ModuleName).String(),
 	)
diff --git a/testing/simapp/app.go b/testing/simapp/app.go
index 7ce4749bb0f..e59e902453b 100644
--- a/testing/simapp/app.go
+++ b/testing/simapp/app.go
@@ -390,6 +390,7 @@ func NewSimApp(
 		appCodec, runtime.NewKVStoreService(keys[ibctransfertypes.StoreKey]), app.GetSubspace(ibctransfertypes.ModuleName),
 		app.IBCFeeKeeper, // ISC4 Wrapper: fee IBC middleware
 		app.IBCKeeper.ChannelKeeper,
+		app.IBCKeeper.ChannelKeeperV2,
 		app.AccountKeeper, app.BankKeeper,
 		authtypes.NewModuleAddress(govtypes.ModuleName).String(),
 	)