diff --git a/.changelog/unreleased/testing/694-dont-spawn-internal-account-vps.md b/.changelog/unreleased/testing/694-dont-spawn-internal-account-vps.md
new file mode 100644
index 0000000000..664438b982
--- /dev/null
+++ b/.changelog/unreleased/testing/694-dont-spawn-internal-account-vps.md
@@ -0,0 +1,2 @@
+- Don't fake a wasm VP for internal addresses in tx tests
+  ([#694](https://github.com/anoma/namada/pull/694))
\ No newline at end of file
diff --git a/tests/src/vm_host_env/tx.rs b/tests/src/vm_host_env/tx.rs
index 6a3ef96084..3eb674946a 100644
--- a/tests/src/vm_host_env/tx.rs
+++ b/tests/src/vm_host_env/tx.rs
@@ -111,14 +111,23 @@ impl TestTxEnv {
         );
     }
 
-    /// Fake accounts existence by initializating their VP storage.
+    /// Fake accounts' existence by initializing their VP storage.
     /// This is needed for accounts that are being modified by a tx test to
-    /// pass account existence check in `tx_write` function.
+    /// pass account existence check in `tx_write` function. Only established
+    /// addresses ([`Address::Established`]) have their VP storage initialized,
+    /// as other types of accounts should not have wasm VPs in storage in any
+    /// case.
     pub fn spawn_accounts(
         &mut self,
         addresses: impl IntoIterator<Item = impl Borrow<Address>>,
     ) {
         for address in addresses {
+            if matches!(
+                address.borrow(),
+                Address::Internal(_) | Address::Implicit(_)
+            ) {
+                continue;
+            }
             let key = Key::validity_predicate(address.borrow());
             let vp_code = vec![];
             self.storage