diff --git a/CHANGELOG.md b/CHANGELOG.md
index 2b52fc9d7d..de27ae0b7f 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -17,6 +17,7 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 - [#1278](https://github.com/regen-network/regen-ledger/pull/1278) Fix `open` not set in `Msg/CreateBatch`
 - [#1281](https://github.com/regen-network/regen-ledger/pull/1281) Fix curator address in state migrations
+- [#1284](https://github.com/regen-network/regen-ledger/pull/1284) Fix basket state migration
 
 ## [v4.0.0-rc1](https://github.com/regen-network/regen-ledger/releases/tag/v4.0.0-rc1) - 2022-07-15
 
diff --git a/x/ecocredit/migrations/v3/state.go b/x/ecocredit/migrations/v3/state.go
index 94d9403af5..5333dab299 100644
--- a/x/ecocredit/migrations/v3/state.go
+++ b/x/ecocredit/migrations/v3/state.go
@@ -324,6 +324,11 @@ func MigrateState(sdkCtx sdk.Context, storeKey storetypes.StoreKey,
 		return err
 	}
 
+	// migrate basket state
+	if err = migrateBasketState(basketStore, ctx, oldBatchDenomToNewDenomMap); err != nil {
+		return err
+	}
+
 	if err := patchMigrate(ctx, sdkCtx, ss, basketStore, oldBatchDenomToNewDenomMap); err != nil {
 		return err
 	}
@@ -331,6 +336,41 @@ func MigrateState(sdkCtx sdk.Context, storeKey storetypes.StoreKey,
 	return nil
 }
 
+// migrateBasketState updates basket balance old batch denom to new batch denom.
+func migrateBasketState(basketStore basketapi.StateStore, ctx context.Context, oldBatchDenomToNewDenomMap map[string]string) error {
+	var balances []*basketapi.BasketBalance
+	itr, err := basketStore.BasketBalanceTable().List(ctx, basketapi.BasketBalancePrimaryKey{})
+	if err != nil {
+		return err
+	}
+
+	for itr.Next() {
+		bBalance, err := itr.Value()
+		if err != nil {
+			return err
+		}
+
+		balances = append(balances, bBalance)
+	}
+	itr.Close()
+
+	for i := 0; i < len(balances); i++ {
+		if err := basketStore.BasketBalanceTable().Delete(ctx, balances[i]); err != nil {
+			return err
+		}
+	}
+
+	for i := 0; i < len(balances); i++ {
+		update := balances[i]
+		update.BatchDenom = oldBatchDenomToNewDenomMap[update.BatchDenom]
+		if err := basketStore.BasketBalanceTable().Insert(ctx, update); err != nil {
+			return err
+		}
+	}
+
+	return nil
+}
+
 // migrateBalances migrates ecocredit tradable and retired balances to orm v1
 func migrateBalances(store storetypes.KVStore, ss api.StateStore, ctx context.Context, batchDenomToBatchMap map[string]batchMapT) error {
 	// migrate tradable balances to ORM v1
diff --git a/x/ecocredit/migrations/v3/state_test.go b/x/ecocredit/migrations/v3/state_test.go
index b56dc0758d..4142284089 100644
--- a/x/ecocredit/migrations/v3/state_test.go
+++ b/x/ecocredit/migrations/v3/state_test.go
@@ -176,6 +176,19 @@ func TestMigrations(t *testing.T) {
 	basketStore, err := basketapi.NewStateStore(ormdb)
 	require.Nil(t, err)
 
+	require.NoError(t, basketStore.BasketBalanceTable().Insert(ormCtx, &basketapi.BasketBalance{
+		BasketId:       1,
+		BatchDenom:     bd1,
+		Balance:        "100",
+		BatchStartDate: nil,
+	}))
+	require.NoError(t, basketStore.BasketBalanceTable().Insert(ormCtx, &basketapi.BasketBalance{
+		BasketId:       2,
+		BatchDenom:     bd2,
+		Balance:        "100",
+		BatchStartDate: nil,
+	}))
+
 	err = v3.MigrateState(sdkCtx, ecocreditKey, encCfg.Marshaler, ss, basketStore, paramStore)
 	require.NoError(t, err)
 
@@ -330,6 +343,18 @@ func TestMigrations(t *testing.T) {
 	bz = store.Get(tradableSKey1)
 	require.Nil(t, bz)
 
+	// verify basket denom migration
+	bBalance, err := basketStore.BasketBalanceTable().Get(ormCtx, 1, expbd1)
+	require.NoError(t, err)
+	require.Equal(t, bBalance.BatchDenom, expbd1)
+	require.Equal(t, bBalance.Balance, "100")
+	require.Equal(t, bBalance.BasketId, uint64(1))
+
+	bBalance, err = basketStore.BasketBalanceTable().Get(ormCtx, 2, expbd2)
+	require.NoError(t, err)
+	require.Equal(t, bBalance.BatchDenom, expbd2)
+	require.Equal(t, bBalance.Balance, "100")
+	require.Equal(t, bBalance.BasketId, uint64(2))
 }
 
 func formatBatchDenom(classId string, batchSeqNo uint64, startDate *time.Time, endDate *time.Time) string {