diff --git a/app/app.go b/app/app.go
index a646d208a5c..5d9f63b53f4 100644
--- a/app/app.go
+++ b/app/app.go
@@ -288,7 +288,7 @@ func NewWasmApp(logger log.Logger, db dbm.DB, traceStore io.Writer, loadLatest b
 		appCodec, keys[authtypes.StoreKey], app.getSubspace(authtypes.ModuleName), authtypes.ProtoBaseAccount, maccPerms,
 	)
 	app.bankKeeper = bankkeeper.NewBaseKeeper(
-		appCodec, keys[banktypes.StoreKey], app.accountKeeper, app.getSubspace(banktypes.ModuleName), app.BlockedAddrs(),
+		appCodec, keys[banktypes.StoreKey], app.accountKeeper, app.getSubspace(banktypes.ModuleName), app.ModuleAccountAddrs(),
 	)
 	stakingKeeper := stakingkeeper.NewKeeper(
 		appCodec, keys[stakingtypes.StoreKey], app.accountKeeper, app.bankKeeper, app.getSubspace(stakingtypes.ModuleName),
@@ -556,17 +556,6 @@ func (app *WasmApp) ModuleAccountAddrs() map[string]bool {
 	return modAccAddrs
 }
 
-// BlockedAddrs returns all the app's module account addresses that are not
-// allowed to receive external tokens.
-func (app *WasmApp) BlockedAddrs() map[string]bool {
-	blockedAddrs := make(map[string]bool)
-	for acc := range maccPerms {
-		blockedAddrs[authtypes.NewModuleAddress(acc).String()] = !allowedReceivingModAcc[acc]
-	}
-
-	return blockedAddrs
-}
-
 // LegacyAmino returns SimApp's amino codec.
 //
 // NOTE: This is solely to be used for testing purposes as it may be desirable
diff --git a/app/app_test.go b/app/app_test.go
index a36dd79c48f..f3251080bd1 100644
--- a/app/app_test.go
+++ b/app/app_test.go
@@ -45,7 +45,11 @@ func TestBlockedAddrs(t *testing.T) {
 	gapp := NewWasmApp(log.NewTMLogger(log.NewSyncWriter(os.Stdout)), db, nil, true, map[int64]bool{}, DefaultNodeHome, 0, wasm.EnableAllProposals, EmptyBaseAppOptions{}, emptyWasmOpts)
 
 	for acc := range maccPerms {
-		require.Equal(t, !allowedReceivingModAcc[acc], gapp.bankKeeper.BlockedAddr(gapp.accountKeeper.GetModuleAddress(acc)))
+		t.Run(acc, func(t *testing.T) {
+			require.True(t, gapp.bankKeeper.BlockedAddr(gapp.accountKeeper.GetModuleAddress(acc)),
+				"ensure that blocked addresses are properly set in bank keeper",
+			)
+		})
 	}
 }
 
diff --git a/go.mod b/go.mod
index a39c04142cd..8c2d00fef8a 100644
--- a/go.mod
+++ b/go.mod
@@ -4,7 +4,7 @@ go 1.15
 
 require (
 	github.com/CosmWasm/wasmvm v0.14.0-beta1
-	github.com/cosmos/cosmos-sdk v0.42.0
+	github.com/cosmos/cosmos-sdk v0.42.1
 	github.com/cosmos/iavl v0.15.3
 	github.com/dvsekhvalnov/jose2go v0.0.0-20200901110807-248326c1351b
 	github.com/gogo/protobuf v1.3.3
diff --git a/go.sum b/go.sum
index ee8eec40887..735beba4371 100644
--- a/go.sum
+++ b/go.sum
@@ -101,8 +101,8 @@ github.com/coreos/go-systemd v0.0.0-20180511133405-39ca1b05acc7/go.mod h1:F5haX7
 github.com/coreos/go-systemd v0.0.0-20190321100706-95778dfbb74e/go.mod h1:F5haX7vjVVG0kc13fIWeqUViNPyEJxv/OmvnBo0Yme4=
 github.com/coreos/pkg v0.0.0-20160727233714-3ac0863d7acf/go.mod h1:E3G3o1h8I7cfcXa63jLwjI0eiQQMgzzUDFVpN/nH/eA=
 github.com/coreos/pkg v0.0.0-20180928190104-399ea9e2e55f/go.mod h1:E3G3o1h8I7cfcXa63jLwjI0eiQQMgzzUDFVpN/nH/eA=
-github.com/cosmos/cosmos-sdk v0.42.0 h1:oQ+rUTYZ5gUq8/YEW83NosCJ3+41iA/3/wZ3pfEIYH8=
-github.com/cosmos/cosmos-sdk v0.42.0/go.mod h1:xiLp1G8mumj82S5KLJGCAyeAlD+7VNomg/aRSJV12yk=
+github.com/cosmos/cosmos-sdk v0.42.1 h1:/0SqvXdxbHBRUFRTLdiL4VYE18DMNXd2ONhC5d90EBQ=
+github.com/cosmos/cosmos-sdk v0.42.1/go.mod h1:xiLp1G8mumj82S5KLJGCAyeAlD+7VNomg/aRSJV12yk=
 github.com/cosmos/go-bip39 v0.0.0-20180819234021-555e2067c45d/go.mod h1:tSxLoYXyBmiFeKpvmq4dzayMdCjCnu8uqmCysIGBT2Y=
 github.com/cosmos/go-bip39 v1.0.0 h1:pcomnQdrdH22njcAatO0yWojsUnCO3y2tNoV1cb6hHY=
 github.com/cosmos/go-bip39 v1.0.0/go.mod h1:RNJv0H/pOIVgxw6KS7QeX2a0Uo0aKUlfhZ4xuwvCdJw=