diff --git a/simapp/simd/cmd/testnet.go b/simapp/simd/cmd/testnet.go
index 0717b398427c..93ec60b675ff 100644
--- a/simapp/simd/cmd/testnet.go
+++ b/simapp/simd/cmd/testnet.go
@@ -289,8 +289,16 @@ func initGenFiles(
 	var bankGenState banktypes.GenesisState
 	clientCtx.JSONMarshaler.MustUnmarshalJSON(appGenState[banktypes.ModuleName], &bankGenState)
 
+<<<<<<< HEAD
 	bankGenState.Balances = genBalances
 	appGenState[banktypes.ModuleName] = clientCtx.JSONMarshaler.MustMarshalJSON(&bankGenState)
+=======
+	bankGenState.Balances = banktypes.SanitizeGenesisBalances(genBalances)
+	for _, bal := range bankGenState.Balances {
+		bankGenState.Supply = bankGenState.Supply.Add(bal.Coins...)
+	}
+	appGenState[banktypes.ModuleName] = clientCtx.Codec.MustMarshalJSON(&bankGenState)
+>>>>>>> 179c819a9 (fix: testnet cli command update genesis supply (#9497))
 
 	appGenStateJSON, err := json.MarshalIndent(appGenState, "", "  ")
 	if err != nil {
diff --git a/simapp/simd/cmd/testnet_test.go b/simapp/simd/cmd/testnet_test.go
new file mode 100644
index 000000000000..da58fd454d82
--- /dev/null
+++ b/simapp/simd/cmd/testnet_test.go
@@ -0,0 +1,50 @@
+package cmd
+
+import (
+	"context"
+	"fmt"
+	"testing"
+
+	"github.com/cosmos/cosmos-sdk/client"
+	"github.com/cosmos/cosmos-sdk/client/flags"
+	"github.com/cosmos/cosmos-sdk/server"
+	"github.com/cosmos/cosmos-sdk/simapp"
+	banktypes "github.com/cosmos/cosmos-sdk/x/bank/types"
+	genutiltest "github.com/cosmos/cosmos-sdk/x/genutil/client/testutil"
+	genutiltypes "github.com/cosmos/cosmos-sdk/x/genutil/types"
+	"github.com/spf13/viper"
+	"github.com/stretchr/testify/require"
+	"github.com/tendermint/tendermint/libs/log"
+)
+
+func Test_TestnetCmd(t *testing.T) {
+	home := t.TempDir()
+	encodingConfig := simapp.MakeTestEncodingConfig()
+	logger := log.NewNopLogger()
+	cfg, err := genutiltest.CreateDefaultTendermintConfig(home)
+	require.NoError(t, err)
+
+	err = genutiltest.ExecInitCmd(simapp.ModuleBasics, home, encodingConfig.Marshaler)
+	require.NoError(t, err)
+
+	serverCtx := server.NewContext(viper.New(), cfg, logger)
+	clientCtx := client.Context{}.
+		WithCodec(encodingConfig.Marshaler).
+		WithHomeDir(home).
+		WithTxConfig(encodingConfig.TxConfig)
+
+	ctx := context.Background()
+	ctx = context.WithValue(ctx, server.ServerContextKey, serverCtx)
+	ctx = context.WithValue(ctx, client.ClientContextKey, &clientCtx)
+	cmd := testnetCmd(simapp.ModuleBasics, banktypes.GenesisBalancesIterator{})
+	cmd.SetArgs([]string{fmt.Sprintf("--%s=test", flags.FlagKeyringBackend), fmt.Sprintf("--output-dir=%s", home)})
+	err = cmd.ExecuteContext(ctx)
+	require.NoError(t, err)
+
+	genFile := cfg.GenesisFile()
+	appState, _, err := genutiltypes.GenesisStateFromGenFile(genFile)
+	require.NoError(t, err)
+
+	bankGenState := banktypes.GetGenesisStateFromAppState(encodingConfig.Marshaler, appState)
+	require.NotEmpty(t, bankGenState.Supply.String())
+}