diff --git a/src/wallet/rpcwallet.cpp b/src/wallet/rpcwallet.cpp
index f84da8981d..509d7b8fb5 100644
--- a/src/wallet/rpcwallet.cpp
+++ b/src/wallet/rpcwallet.cpp
@@ -5876,7 +5876,12 @@ static UniValue createrawpegin(const JSONRPCRequest& request, T_tx_ref& txBTCRef
     unsigned int nBytes = GetVirtualTransactionSize(CTransaction(mtx)) +
         (1+1+72+1+33/WITNESS_SCALE_FACTOR);
     CCoinControl coin_control;
-    CAmount nFeeNeeded = GetMinimumFee(*pwallet, nBytes, coin_control, nullptr);
+    FeeCalculation feeCalc;
+    CAmount nFeeNeeded = GetMinimumFee(*pwallet, nBytes, coin_control, &feeCalc);
+
+    if (nFeeNeeded == CAmount{0} && feeCalc.reason == FeeReason::FALLBACK) {
+        throw JSONRPCError(RPC_WALLET_INSUFFICIENT_FUNDS, "Fee estimation failed. Fallbackfee is disabled. Wait a few blocks or enable -fallbackfee.");
+    }
 
     mtx.vout[0].nValue = mtx.vout[0].nValue.GetAmount() - nFeeNeeded;
     mtx.vout[1].nValue = mtx.vout[1].nValue.GetAmount() + nFeeNeeded;
diff --git a/test/functional/wallet_fallbackfee.py b/test/functional/wallet_fallbackfee.py
index b128d10384..fd99769e9b 100755
--- a/test/functional/wallet_fallbackfee.py
+++ b/test/functional/wallet_fallbackfee.py
@@ -5,10 +5,11 @@
 """Test wallet replace-by-fee capabilities in conjunction with the fallbackfee."""
 from test_framework.test_framework import BitcoinTestFramework
 from test_framework.util import assert_raises_rpc_error
+from test_framework.util import rpc_port ## ELEMENTS
 
 class WalletRBFTest(BitcoinTestFramework):
     def set_test_params(self):
-        self.num_nodes = 1
+        self.num_nodes = 2
         self.setup_clean_chain = True
 
     def skip_test_if_missing_module(self):
@@ -26,5 +27,32 @@ class WalletRBFTest(BitcoinTestFramework):
         assert_raises_rpc_error(-4, "Fee estimation failed", lambda: self.nodes[0].fundrawtransaction(self.nodes[0].createrawtransaction([], [{self.nodes[0].getnewaddress(): 1}])))
         assert_raises_rpc_error(-6, "Fee estimation failed", lambda: self.nodes[0].sendmany("", {self.nodes[0].getnewaddress(): 1}))
 
+        ## ELEMENTS: test claimpegin with fallback fee set to zero
+        # getpeginaddress does not work with descriptor wallets yet
+        if not self.options.descriptors:
+            extra_args = [
+                '-fallbackfee=0',
+                '-mainchainrpchost=127.0.0.1',
+                '-mainchainrpcport=%s' % rpc_port(0),
+                '-parentgenesisblockhash=%s' % self.nodes[0].getblockhash(0),
+                '-con_parent_chain_signblockscript=51',
+                '-parentscriptprefix=75',
+            ]
+            self.restart_node(0)
+            self.restart_node(1, extra_args)
+
+            addrs = self.nodes[1].getpeginaddress()
+            txid = self.nodes[0].sendtoaddress(addrs["mainchain_address"], 5)
+            raw = self.nodes[0].getrawtransaction(txid)
+            self.nodes[0].generate(12)
+            proof = self.nodes[0].gettxoutproof([txid])
+            assert_raises_rpc_error(-6, "Fee estimation failed", lambda: self.nodes[1].claimpegin(raw, proof))
+
+            # Try again with fallbackfee below the min relay fee. It should just work
+            # (will let the relay fee override the fallbackfee)
+            extra_args[0] = '-fallbackfee=0.00000001'
+            self.restart_node(1, extra_args)
+            self.nodes[1].claimpegin(raw, proof)
+
 if __name__ == '__main__':
     WalletRBFTest().main()