diff --git a/CHANGELOG.md b/CHANGELOG.md
index ac66906fc..43db489bb 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -63,6 +63,7 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 - [#1796](https://github.com/NibiruChain/nibiru/pull/1796) - fix(inflation): fix num skipped epoch when inflation is added to an existing chain
 - [#1797](https://github.com/NibiruChain/nibiru/pull/1797) - fix(inflation): fix num skipped epoch updates logic
 - [#1804](https://github.com/NibiruChain/nibiru/pull/1804) - fix(inflation): update default parameters
+- [#1816](https://github.com/NibiruChain/nibiru/pull/1816) - fix(ibc): fix ibc transaction from wasm contract
 
 #### Dapp modules: perp, spot, etc
 
diff --git a/app/keepers.go b/app/keepers.go
index 10418a946..63350526f 100644
--- a/app/keepers.go
+++ b/app/keepers.go
@@ -411,6 +411,18 @@ func (app *NibiruApp) InitKeepers(
 		app.BankKeeper,
 	)
 
+	app.ibcTransferKeeper = ibctransferkeeper.NewKeeper(
+		appCodec,
+		keys[ibctransfertypes.StoreKey],
+		/* paramSubspace */ app.GetSubspace(ibctransfertypes.ModuleName),
+		/* ibctransfertypes.ICS4Wrapper */ app.ibcFeeKeeper,
+		/* ibctransfertypes.ChannelKeeper */ app.ibcKeeper.ChannelKeeper,
+		/* ibctransfertypes.PortKeeper */ &app.ibcKeeper.PortKeeper,
+		app.AccountKeeper,
+		app.BankKeeper,
+		app.ScopedTransferKeeper,
+	)
+
 	app.ScopedWasmKeeper = app.capabilityKeeper.ScopeToModule(wasmtypes.ModuleName)
 
 	wasmDir := filepath.Join(homePath, "data")
@@ -478,21 +490,6 @@ func (app *NibiruApp) InitKeepers(
 		app.slashingKeeper,
 	)
 
-	/* Create IBC module and a static IBC router */
-	ibcRouter := porttypes.NewRouter()
-
-	app.ibcTransferKeeper = ibctransferkeeper.NewKeeper(
-		appCodec,
-		keys[ibctransfertypes.StoreKey],
-		/* paramSubspace */ app.GetSubspace(ibctransfertypes.ModuleName),
-		/* ibctransfertypes.ICS4Wrapper */ app.ibcFeeKeeper,
-		/* ibctransfertypes.ChannelKeeper */ app.ibcKeeper.ChannelKeeper,
-		/* ibctransfertypes.PortKeeper */ &app.ibcKeeper.PortKeeper,
-		app.AccountKeeper,
-		app.BankKeeper,
-		app.ScopedTransferKeeper,
-	)
-
 	// Mock Module setup for testing IBC and also acts as the interchain accounts authentication module
 	// NOTE: the IBC mock keeper and application module is used only for testing core IBC. Do
 	// not replicate if you do not need to test core IBC or light clients.
@@ -509,6 +506,8 @@ func (app *NibiruApp) InitKeepers(
 	// - IBC Fee Middleware
 	// - Transfer
 
+	ibcRouter := porttypes.NewRouter()
+
 	// create IBC module from bottom to top of stack
 	var transferStack porttypes.IBCModule
 	transferStack = ibctransfer.NewIBCModule(app.ibcTransferKeeper)
diff --git a/go.mod b/go.mod
index 319a0c11e..f2d4f835f 100644
--- a/go.mod
+++ b/go.mod
@@ -16,7 +16,7 @@ require (
 	github.com/cosmos/cosmos-sdk v0.47.10
 	github.com/cosmos/go-bip39 v1.0.0
 	github.com/cosmos/gogoproto v1.4.10
-	github.com/cosmos/ibc-go/v7 v7.3.1
+	github.com/cosmos/ibc-go/v7 v7.3.2
 	github.com/gogo/protobuf v1.3.3
 	github.com/golang/mock v1.6.0
 	github.com/golang/protobuf v1.5.3
diff --git a/go.sum b/go.sum
index 738108a88..c32b3a7ce 100644
--- a/go.sum
+++ b/go.sum
@@ -415,8 +415,8 @@ github.com/cosmos/gogoproto v1.4.10 h1:QH/yT8X+c0F4ZDacDv3z+xE3WU1P1Z3wQoLMBRJoK
 github.com/cosmos/gogoproto v1.4.10/go.mod h1:3aAZzeRWpAwr+SS/LLkICX2/kDFyaYVzckBDzygIxek=
 github.com/cosmos/iavl v0.20.0 h1:fTVznVlepH0KK8NyKq8w+U7c2L6jofa27aFX6YGlm38=
 github.com/cosmos/iavl v0.20.0/go.mod h1:WO7FyvaZJoH65+HFOsDir7xU9FWk2w9cHXNW1XHcl7A=
-github.com/cosmos/ibc-go/v7 v7.3.1 h1:bil1IjnHdyWDASFYKfwdRiNtFP6WK3osW7QFEAgU4I8=
-github.com/cosmos/ibc-go/v7 v7.3.1/go.mod h1:wvx4pPBofe5ZdMNV3OFRxSI4auEP5Qfqf8JXLLNV04g=
+github.com/cosmos/ibc-go/v7 v7.3.2 h1:FeUDcBX7VYY0e0iRmcVkPPUjYfAqIc//QuHXo8JHz9c=
+github.com/cosmos/ibc-go/v7 v7.3.2/go.mod h1:IMeOXb7gwpZ+/nOG5BuUkdW4weM1ezvN4PQPws4uzOI=
 github.com/cosmos/ics23/go v0.10.0 h1:iXqLLgp2Lp+EdpIuwXTYIQU+AiHj9mOC2X9ab++bZDM=
 github.com/cosmos/ics23/go v0.10.0/go.mod h1:ZfJSmng/TBNTBkFemHHHj5YY7VAU/MBU980F4VU1NG0=
 github.com/cosmos/ledger-cosmos-go v0.12.4 h1:drvWt+GJP7Aiw550yeb3ON/zsrgW0jgh5saFCr7pDnw=