diff --git a/app/keepers/keepers.go b/app/keepers/keepers.go
index ac5be946af..63f1727e7e 100644
--- a/app/keepers/keepers.go
+++ b/app/keepers/keepers.go
@@ -16,7 +16,9 @@ import (
 	ratelimit "github.com/cosmos/ibc-apps/modules/rate-limiting/v10"
 	ratelimitkeeper "github.com/cosmos/ibc-apps/modules/rate-limiting/v10/keeper"
 	ratelimittypes "github.com/cosmos/ibc-apps/modules/rate-limiting/v10/types"
+	ratelimitv2 "github.com/cosmos/ibc-apps/modules/rate-limiting/v10/v2"
 	ibccallbacks "github.com/cosmos/ibc-go/modules/apps/callbacks"
+	ibccallbacksv2 "github.com/cosmos/ibc-go/modules/apps/callbacks/v2"
 	ibcwasmkeeper "github.com/cosmos/ibc-go/modules/light-clients/08-wasm/keeper"
 	ibcwasmtypes "github.com/cosmos/ibc-go/modules/light-clients/08-wasm/types"
 	ica "github.com/cosmos/ibc-go/v10/modules/apps/27-interchain-accounts"
@@ -29,9 +31,11 @@ import (
 	"github.com/cosmos/ibc-go/v10/modules/apps/transfer"
 	ibctransferkeeper "github.com/cosmos/ibc-go/v10/modules/apps/transfer/keeper"
 	ibctransfertypes "github.com/cosmos/ibc-go/v10/modules/apps/transfer/types"
+	transferv2 "github.com/cosmos/ibc-go/v10/modules/apps/transfer/v2"
 	ibcclienttypes "github.com/cosmos/ibc-go/v10/modules/core/02-client/types"
 	ibcconnectiontypes "github.com/cosmos/ibc-go/v10/modules/core/03-connection/types"
 	porttypes "github.com/cosmos/ibc-go/v10/modules/core/05-port/types"
+	ibcapi "github.com/cosmos/ibc-go/v10/modules/core/api"
 	ibcexported "github.com/cosmos/ibc-go/v10/modules/core/exported"
 	ibckeeper "github.com/cosmos/ibc-go/v10/modules/core/keeper"
 	icsprovider "github.com/cosmos/interchain-security/v7/x/ccv/provider"
@@ -539,6 +543,13 @@ func NewAppKeeper(
 	appKeepers.ICAControllerKeeper.WithICS4Wrapper(icaICS4Wrapper)
 	wasmStack := wasm.NewIBCHandler(appKeepers.WasmKeeper, appKeepers.IBCKeeper.ChannelKeeper, appKeepers.IBCKeeper.ChannelKeeper)
 
+	// Create IBCv2 Transfer Stack
+	var transferStackV2 ibcapi.IBCModule
+	transferStackV2 = transferv2.NewIBCModule(appKeepers.TransferKeeper)
+	transferStackV2 = ibccallbacksv2.NewIBCMiddleware(transferStackV2, appKeepers.IBCKeeper.ChannelKeeperV2,
+		wasmStackIBCHandler, appKeepers.IBCKeeper.ChannelKeeperV2, gaiaparams.MaxIBCCallbackGas)
+	transferStackV2 = ratelimitv2.NewIBCMiddleware(appKeepers.RatelimitKeeper, transferStackV2)
+
 	// Create IBC Router & seal
 	ibcRouter := porttypes.NewRouter().
 		AddRoute(icahosttypes.SubModuleName, icaHostStack).
@@ -549,6 +560,11 @@ func NewAppKeeper(
 
 	appKeepers.IBCKeeper.SetRouter(ibcRouter)
 
+	// Create IBCv2 Router & seal
+	ibcv2Router := ibcapi.NewRouter().
+		AddRoute(ibctransfertypes.PortID, transferStackV2)
+	appKeepers.IBCKeeper.SetRouterV2(ibcv2Router)
+
 	return appKeepers
 }
 
diff --git a/app/upgrades/v23/upgrades.go b/app/upgrades/v23/upgrades.go
index 0805144f2a..adcd4e9257 100644
--- a/app/upgrades/v23/upgrades.go
+++ b/app/upgrades/v23/upgrades.go
@@ -4,7 +4,7 @@ import (
 	"context"
 
 	ibcwasmtypes "github.com/cosmos/ibc-go/modules/light-clients/08-wasm/types"
-	clientkeeper "github.com/cosmos/ibc-go/v10/modules/core/02-client/keeper"
+	ibctmtypes "github.com/cosmos/ibc-go/v10/modules/light-clients/07-tendermint"
 
 	errorsmod "cosmossdk.io/errors"
 	upgradetypes "cosmossdk.io/x/upgrade/types"
@@ -30,17 +30,12 @@ func CreateUpgradeHandler(
 			return vm, errorsmod.Wrapf(err, "running module migrations")
 		}
 
-		// Add the Wasm client type to the allowed clients
-		Add08WasmToAllowedClients(ctx, *keepers.IBCKeeper.ClientKeeper)
+		// Set IBC Client AllowedClients
+		params := keepers.IBCKeeper.ClientKeeper.GetParams(ctx)
+		params.AllowedClients = []string{ibctmtypes.ModuleName, ibcwasmtypes.ModuleName}
+		keepers.IBCKeeper.ClientKeeper.SetParams(ctx, params)
 
 		ctx.Logger().Info("Upgrade v23 complete")
 		return vm, nil
 	}
 }
-
-func Add08WasmToAllowedClients(ctx sdk.Context, clientKeeper clientkeeper.Keeper) {
-	// explicitly update the IBC 02-client params, adding the wasm client type
-	params := clientKeeper.GetParams(ctx)
-	params.AllowedClients = append(params.AllowedClients, ibcwasmtypes.Wasm)
-	clientKeeper.SetParams(ctx, params)
-}