diff --git a/src/coins.cpp b/src/coins.cpp
index da1036acfb..5da63c5202 100644
--- a/src/coins.cpp
+++ b/src/coins.cpp
@@ -236,6 +236,9 @@ bool CCoinsViewCache::HaveInputs(const CTransaction& tx) const
 {
     if (!tx.IsCoinBase()) {
         for (unsigned int i = 0; i < tx.vin.size(); i++) {
+            if (tx.vin[i].m_is_pegin) {
+                continue;
+            }
             if (!HaveCoin(tx.vin[i].prevout)) {
                 return false;
             }
diff --git a/src/consensus/tx_verify.cpp b/src/consensus/tx_verify.cpp
index be73d0a2f9..fb07f472a0 100644
--- a/src/consensus/tx_verify.cpp
+++ b/src/consensus/tx_verify.cpp
@@ -54,6 +54,11 @@ std::pair<int, int64_t> CalculateSequenceLocks(const CTransaction &tx, int flags
     for (size_t txinIndex = 0; txinIndex < tx.vin.size(); txinIndex++) {
         const CTxIn& txin = tx.vin[txinIndex];
 
+        // Peg-ins have no output height
+        if (txin.m_is_pegin) {
+            continue;
+        }
+
         // Sequence numbers with the most significant bit set are not
         // treated as relative lock-times, nor are they given any
         // consensus-enforced meaning at this point.
@@ -126,6 +131,11 @@ unsigned int GetP2SHSigOpCount(const CTransaction& tx, const CCoinsViewCache& in
     unsigned int nSigOps = 0;
     for (unsigned int i = 0; i < tx.vin.size(); i++)
     {
+        // Peg-in inputs are segwit-only
+        if (tx.vin[i].m_is_pegin) {
+            continue;
+        }
+
         const Coin& coin = inputs.AccessCoin(tx.vin[i].prevout);
         assert(!coin.IsSpent());
         const CTxOut &prevout = coin.out;
diff --git a/src/policy/policy.cpp b/src/policy/policy.cpp
index b8f7963a0c..d37fa4fd23 100644
--- a/src/policy/policy.cpp
+++ b/src/policy/policy.cpp
@@ -163,6 +163,11 @@ bool AreInputsStandard(const CTransaction& tx, const CCoinsViewCache& mapInputs)
 
     for (unsigned int i = 0; i < tx.vin.size(); i++)
     {
+        if (tx.vin[i].m_is_pegin) {
+            // This deals with p2sh in general only
+            continue;
+        }
+
         const CTxOut& prev = mapInputs.AccessCoin(tx.vin[i].prevout).out;
 
         std::vector<std::vector<unsigned char> > vSolutions;
diff --git a/src/rpc/blockchain.cpp b/src/rpc/blockchain.cpp
index 090699d86f..52eb8ca1a7 100644
--- a/src/rpc/blockchain.cpp
+++ b/src/rpc/blockchain.cpp
@@ -1889,6 +1889,10 @@ static UniValue getblockstats(const JSONRPCRequest& request)
             }
             CAmount tx_total_in = 0;
             for (const CTxIn& in : tx->vin) {
+                if (in.m_is_pegin) {
+                    continue;
+                }
+
                 CTransactionRef tx_in;
                 uint256 hashBlock;
                 if (!GetTransaction(in.prevout.hash, tx_in, Params().GetConsensus(), hashBlock, false)) {
diff --git a/src/validation.cpp b/src/validation.cpp
index 925db82061..387aafb481 100644
--- a/src/validation.cpp
+++ b/src/validation.cpp
@@ -395,6 +395,12 @@ bool CheckSequenceLocks(const CTransaction &tx, int flags, LockPoints* lp, bool
         prevheights.resize(tx.vin.size());
         for (size_t txinIndex = 0; txinIndex < tx.vin.size(); txinIndex++) {
             const CTxIn& txin = tx.vin[txinIndex];
+            // pegins should not restrict validity of sequence locks
+            if (txin.m_is_pegin) {
+                prevheights[txinIndex] = -1;
+                continue;
+            }
+
             Coin coin;
             if (!viewMemPool.GetCoin(txin.prevout, coin)) {
                 return error("%s: Missing input", __func__);
@@ -537,6 +543,10 @@ static bool CheckInputsFromMempoolAndCache(const CTransaction& tx, CValidationSt
 
     assert(!tx.IsCoinBase());
     for (const CTxIn& txin : tx.vin) {
+        if (txin.m_is_pegin) {
+            continue;
+        }
+
         const Coin& coin = view.AccessCoin(txin.prevout);
 
         // At this point we haven't actually checked if the coins are all
@@ -658,6 +668,12 @@ static bool AcceptToMemoryPoolWorker(const CChainParams& chainparams, CTxMemPool
 
         // do all inputs exist?
         for (const CTxIn& txin : tx.vin) {
+            // ELEMENTS:
+            // Don't look for coins that only exist in parent chain
+            if (txin.m_is_pegin) {
+                continue;
+            }
+
             if (!pcoinsTip->HaveCoinInCache(txin.prevout)) {
                 coins_to_uncache.push_back(txin.prevout);
             }
@@ -714,6 +730,10 @@ static bool AcceptToMemoryPoolWorker(const CChainParams& chainparams, CTxMemPool
         // during reorgs to ensure COINBASE_MATURITY is still met.
         bool fSpendsCoinbase = false;
         for (const CTxIn &txin : tx.vin) {
+            // ELEMENTS:
+            if (txin.m_is_pegin) {
+                continue;
+            }
             const Coin &coin = view.AccessCoin(txin.prevout);
             if (coin.IsCoinBase()) {
                 fSpendsCoinbase = true;
@@ -2040,7 +2060,11 @@ bool CChainState::ConnectBlock(const CBlock& block, CValidationState& state, CBl
             // be in ConnectBlock because they require the UTXO set
             prevheights.resize(tx.vin.size());
             for (size_t j = 0; j < tx.vin.size(); j++) {
-                prevheights[j] = view.AccessCoin(tx.vin[j].prevout).nHeight;
+                if (tx.vin[j].m_is_pegin) {
+                    prevheights[j] = -1;
+                } else {
+                    prevheights[j] = view.AccessCoin(tx.vin[j].prevout).nHeight;
+                }
             }
 
             if (!SequenceLocks(tx, nLockTimeFlags, &prevheights, *pindex)) {
diff --git a/src/wallet/wallet.cpp b/src/wallet/wallet.cpp
index 5a7fdf9a85..0562f5633b 100644
--- a/src/wallet/wallet.cpp
+++ b/src/wallet/wallet.cpp
@@ -3080,6 +3080,10 @@ bool CWallet::CommitTransaction(CTransactionRef tx, mapValue_t mapValue, std::ve
             // Notify that old coins are spent
             for (const CTxIn& txin : wtxNew.tx->vin)
             {
+                // Pegins are not in our UTXO set.
+                if (txin.m_is_pegin)
+                    continue;
+
                 CWalletTx &coin = mapWallet.at(txin.prevout.hash);
                 coin.BindWallet(this);
                 NotifyTransactionChanged(this, coin.GetHash(), CT_UPDATED);