diff --git a/contracts/btc-finality/src/contract.rs b/contracts/btc-finality/src/contract.rs
index edd3d5ba..fa6b57ae 100644
--- a/contracts/btc-finality/src/contract.rs
+++ b/contracts/btc-finality/src/contract.rs
@@ -212,7 +212,8 @@ fn handle_end_block(
         let ev = finality::index_block(deps, env.block.height, &hex::decode(app_hash_hex)?)?;
         res = res.add_event(ev);
         // Tally all non-finalised blocks
-        let events = finality::tally_blocks(deps, activated_height, env.block.height)?;
+        let (msgs, events) = finality::tally_blocks(deps, activated_height, env.block.height)?;
+        res = res.add_messages(msgs);
         res = res.add_events(events);
     }
     Ok(res)
diff --git a/contracts/btc-finality/src/finality.rs b/contracts/btc-finality/src/finality.rs
index 41a64fdd..980ed7db 100644
--- a/contracts/btc-finality/src/finality.rs
+++ b/contracts/btc-finality/src/finality.rs
@@ -422,7 +422,7 @@ pub fn tally_blocks(
     deps: &mut DepsMut,
     activated_height: u64,
     height: u64,
-) -> Result<Vec<Event>, ContractError> {
+) -> Result<(Vec<BabylonMsg>, Vec<Event>), ContractError> {
     // Start finalising blocks since max(activated_height, next_height)
     let next_height = NEXT_HEIGHT.may_load(deps.storage)?.unwrap_or(0);
     let start_height = max(activated_height, next_height);
@@ -436,6 +436,7 @@ pub fn tally_blocks(
     // - Does not have finality providers, finalised: Impossible, panic.
     // After this for loop, the blocks since the earliest activated height are either finalised or
     // non-finalisable
+    let mut msgs = vec![];
     let mut events = vec![];
     for h in start_height..=height {
         let mut indexed_block = BLOCKS.load(deps.storage, h)?;
@@ -451,7 +452,9 @@ pub fn tally_blocks(
                     .collect::<StdResult<Vec<_>>>()?;
                 if tally(&fp_set, &voter_btc_pks) {
                     // If this block gets >2/3 votes, finalise it
-                    let ev = finalize_block(deps.storage, &mut indexed_block, &voter_btc_pks)?;
+                    let (msg, ev) =
+                        finalize_block(deps.storage, &mut indexed_block, &voter_btc_pks)?;
+                    msgs.push(msg);
                     events.push(ev);
                 } else {
                     // If not, then this block and all subsequent blocks should not be finalised.
@@ -480,7 +483,7 @@ pub fn tally_blocks(
             }
         }
     }
-    Ok(events)
+    Ok((msgs, events))
 }
 
 /// `tally` checks whether a block with the given finality provider set and votes reaches a quorum
@@ -504,7 +507,7 @@ fn finalize_block(
     store: &mut dyn Storage,
     block: &mut IndexedBlock,
     _voters: &[String],
-) -> Result<Event, ContractError> {
+) -> Result<(BabylonMsg, Event), ContractError> {
     // Set block to be finalised
     block.finalized = true;
     BLOCKS.save(store, block.height, block)?;
@@ -512,13 +515,16 @@ fn finalize_block(
     // Set the next height to finalise as height+1
     NEXT_HEIGHT.save(store, &(block.height + 1))?;
 
+    // Generate block rewards for BTC staking delegators
+    let msg = BabylonMsg::MintRewards {};
+
     // TODO: Distribute rewards to BTC staking delegators
 
     // Record the last finalized height metric
     let ev = Event::new("finalize_block")
         .add_attribute("module", "finality")
         .add_attribute("finalized_height", block.height.to_string());
-    Ok(ev)
+    Ok((msg, ev))
 }
 
 const QUERY_LIMIT: Option<u32> = Some(30);
diff --git a/packages/bindings-test/src/multitest.rs b/packages/bindings-test/src/multitest.rs
index 731cca46..a114c2ed 100644
--- a/packages/bindings-test/src/multitest.rs
+++ b/packages/bindings-test/src/multitest.rs
@@ -88,6 +88,10 @@ impl Module for BabylonModule {
                 // FIXME? We don't do anything here
                 Ok(AppResponse::default())
             }
+            BabylonMsg::MintRewards {} => {
+                // FIXME? We don't do anything here
+                Ok(AppResponse::default())
+            }
         }
     }
 
diff --git a/packages/bindings/src/msg.rs b/packages/bindings/src/msg.rs
index 10b0f3a9..27c52001 100644
--- a/packages/bindings/src/msg.rs
+++ b/packages/bindings/src/msg.rs
@@ -17,6 +17,11 @@ pub enum BabylonMsg {
         height: i64,
         time: i64, // NOTE: UNIX timestamp is in i64
     },
+    /// MintRewards mints the block rewards for the finality providers.
+    /// It can only be sent from the finality contract.
+    /// The rewards are minted to the staking contract address, so that they
+    /// can be distributed across the active finality provider set
+    MintRewards {},
 }
 
 pub type BabylonSudoMsg = Empty;