diff --git a/app/app.go b/app/app.go
index d459b12ade..4b25a4f198 100644
--- a/app/app.go
+++ b/app/app.go
@@ -1599,6 +1599,12 @@ func (app *App) DecodeTransactionsConcurrently(ctx sdk.Context, txs [][]byte) []
 		wg.Add(1)
 		go func(idx int, encodedTx []byte) {
 			defer wg.Done()
+			defer func() {
+				if err := recover(); err != nil {
+					ctx.Logger().Error(fmt.Sprintf("encountered panic during transaction decoding: %s", err))
+					typedTxs[idx] = nil
+				}
+			}()
 			typedTx, err := app.txDecoder(encodedTx)
 			// get txkey from tx
 			if err != nil {
@@ -1899,6 +1905,11 @@ func (app *App) BlacklistedAccAddrs() map[string]bool {
 	return blacklistedAddrs
 }
 
+// test-only
+func (app *App) SetTxDecoder(txDecoder sdk.TxDecoder) {
+	app.txDecoder = txDecoder
+}
+
 func init() {
 	// override max wasm size to 2MB
 	wasmtypes.MaxWasmSize = 2 * 1024 * 1024
diff --git a/app/app_test.go b/app/app_test.go
index 60d51d42f5..d486ff30e8 100644
--- a/app/app_test.go
+++ b/app/app_test.go
@@ -4,15 +4,16 @@ import (
 	"context"
 	"encoding/hex"
 	"fmt"
+	"math/big"
+	"reflect"
+	"testing"
+	"time"
+
 	"github.com/cosmos/cosmos-sdk/client"
 	"github.com/cosmos/cosmos-sdk/server/api"
 	cosmosConfig "github.com/cosmos/cosmos-sdk/server/config"
 	"github.com/gorilla/mux"
 	"github.com/grpc-ecosystem/grpc-gateway/runtime"
-	"math/big"
-	"reflect"
-	"testing"
-	"time"
 
 	"github.com/cosmos/cosmos-sdk/crypto/keys/secp256k1"
 	sdk "github.com/cosmos/cosmos-sdk/types"
@@ -360,6 +361,13 @@ func TestDecodeTransactionsConcurrently(t *testing.T) {
 	require.NotNil(t, typedTxs[0].GetMsgs()[0].(*evmtypes.MsgEVMTransaction).Derived)
 	require.Nil(t, typedTxs[1])
 	require.NotNil(t, typedTxs[2])
+
+	// test panic handling
+	testWrapper.App.SetTxDecoder(func(txBytes []byte) (sdk.Tx, error) { panic("test") })
+	typedTxs = testWrapper.App.DecodeTransactionsConcurrently(testWrapper.Ctx, [][]byte{evmtxbz, invalidbz, banktxbz})
+	require.Nil(t, typedTxs[0])
+	require.Nil(t, typedTxs[1])
+	require.Nil(t, typedTxs[2])
 }
 
 func TestApp_RegisterAPIRoutes(t *testing.T) {