diff --git a/cardano-testnet/cardano-testnet.cabal b/cardano-testnet/cardano-testnet.cabal
index 2206d268cd8..98303a87c94 100644
--- a/cardano-testnet/cardano-testnet.cabal
+++ b/cardano-testnet/cardano-testnet.cabal
@@ -108,22 +108,26 @@ test-suite cardano-testnet-tests
                         Test.Misc
                         Test.Node.Shutdown
                         Test.ShutdownOnSlotSynced
+                        Test.FoldBlocks
 
   type:                 exitcode-stdio-1.0
 
   build-depends:        aeson
+                      , async
                       , cardano-api
                       , cardano-cli
                       , cardano-testnet
                       , containers
                       , directory
                       , filepath
-                      , hedgehog                      
+                      , hedgehog
                       , hedgehog-extras
                       , process
                       , tasty
+                      , tasty-hedgehog
                       , text
                       , time
+                      , transformers
 
 
   other-modules:
diff --git a/cardano-testnet/test/Main.hs b/cardano-testnet/test/Main.hs
index 40e2d94fe38..678b6950083 100644
--- a/cardano-testnet/test/Main.hs
+++ b/cardano-testnet/test/Main.hs
@@ -16,6 +16,7 @@ import qualified Test.Cli.Babbage.LeadershipSchedule
 import qualified Test.Cli.KesPeriodInfo
 import qualified Test.Node.Shutdown
 import qualified Test.ShutdownOnSlotSynced
+import qualified Test.FoldBlocks
 import qualified Util.Ignore as H
 
 tests :: IO TestTree
@@ -34,6 +35,7 @@ tests = pure $ T.testGroup "test/Spec.hs"
       -- as a result of the kes-period-info output to stdout.
       -- TODO: Babbage temporarily ignored due to broken protocol-state query
     , H.disabled "kes-period-info" Test.Cli.KesPeriodInfo.hprop_kes_period_info
+    , Test.FoldBlocks.tests
     ]
   ]
 
diff --git a/cardano-testnet/test/Test/FoldBlocks.hs b/cardano-testnet/test/Test/FoldBlocks.hs
new file mode 100644
index 00000000000..52acf5a3f24
--- /dev/null
+++ b/cardano-testnet/test/Test/FoldBlocks.hs
@@ -0,0 +1,79 @@
+{-# LANGUAGE NamedFieldPuns     #-}
+{-# LANGUAGE OverloadedStrings  #-}
+{-# LANGUAGE StandaloneDeriving #-}
+
+module Test.FoldBlocks where
+
+import Prelude
+import System.FilePath ((</>))
+import qualified System.Directory as IO
+import qualified Control.Concurrent as IO
+import           Control.Monad.Trans.Except (runExceptT)
+import           Control.Monad.IO.Class (liftIO)
+import qualified Data.Text as TS
+import           Control.Concurrent.Async (async, link)
+import           Control.Exception (Exception, throw)
+
+import qualified Hedgehog as H
+import qualified Hedgehog.Extras.Test.Base as H
+import qualified Hedgehog.Extras.Test as HE
+import qualified Hedgehog.Extras.Stock.IO.Network.Sprocket as HE
+import Test.Tasty.Hedgehog (testPropertyNamed)
+import Test.Tasty (TestTree, testGroup)
+
+import qualified Cardano.Api as C
+import qualified Testnet.Cardano as TN
+import qualified Testnet.Conf as TC (Conf (..), ProjectBase (ProjectBase), YamlFilePath (YamlFilePath), mkConf)
+import qualified Util.Base as U
+import qualified Util.Runtime as U
+
+
+data FoldBlocksException = FoldBlocksException C.FoldBlocksError
+instance Exception FoldBlocksException
+instance Show FoldBlocksException where
+  show (FoldBlocksException a) = TS.unpack $ C.renderFoldBlocksError a
+
+tests :: TestTree
+tests = testGroup "FoldBlocks"
+  [ testPropertyNamed "foldBlocks receives ledger state" "prop_foldBlocks_fails" prop_foldBlocks
+  ]
+
+-- | This test starts a testnet with wery short timing, then starts
+-- foldBlocks in another thread to listen for ledger state, ledger
+-- events and block, and on reception writes this to an MVar that main
+-- thread blocks on.
+prop_foldBlocks :: H.Property
+prop_foldBlocks = U.integration . H.runFinallies . H.workspace "chairman" $ \tempAbsBasePath' -> do
+
+  -- Start testnet
+  base <- HE.noteM $ liftIO . IO.canonicalizePath =<< HE.getProjectBase
+  configurationTemplate <- H.noteShow $ base </> "configuration/defaults/byron-mainnet/configuration.yaml"
+  conf <- HE.noteShowM $
+    TC.mkConf (TC.ProjectBase base) (TC.YamlFilePath configurationTemplate)
+      (tempAbsBasePath' <> "/")
+      Nothing
+
+  let options = TN.defaultTestnetOptions
+        -- Set opoch to 1 slot, slot to 0.1 seconds
+        { TN.epochLength = 1
+        , TN.slotLength = 0.1
+        }
+  runtime <- TN.cardanoTestnet options conf
+
+  -- Get socketPath
+  socketPathAbs <- do
+    socketPath' <- HE.sprocketArgumentName <$> HE.headM (U.nodeSprocket <$> TN.bftNodes runtime)
+    H.note =<< (liftIO $ IO.canonicalizePath $ TC.tempAbsPath conf </> socketPath')
+  configurationFile <- H.noteShow $ TC.tempAbsPath conf </> "configuration.yaml"
+
+  -- Start foldBlocks in a separate thread
+  lock <- liftIO IO.newEmptyMVar
+  liftIO $ do
+    a <- async $ do
+      let handler _env _ledgerState _ledgerEvents _blockInCardanoMode _ = IO.putMVar lock ()
+      e <- runExceptT (C.foldBlocks configurationFile socketPathAbs  C.QuickValidation () handler)
+      either (throw . FoldBlocksException) (\_ -> pure ()) e
+    link a -- Throw foldBlocks threads' exceptions in main thread.
+
+  _ <- liftIO $ IO.readMVar lock
+  H.assert True