diff --git a/crates/utils/src/bitcoin_client.rs b/crates/utils/src/bitcoin_client.rs
index 92be62df..050e07d3 100644
--- a/crates/utils/src/bitcoin_client.rs
+++ b/crates/utils/src/bitcoin_client.rs
@@ -9,6 +9,7 @@ use bitcoin::{
 };
 use bitcoincore_rpc::{
     bitcoin::{BlockHash, Transaction},
+    json,
     json::{EstimateMode, TestMempoolAcceptResult},
     jsonrpc::{error::RpcError, Error as JsonRpcError},
     Auth, Client, Error as BitcoinError, RpcApi,
@@ -181,6 +182,20 @@ pub struct BumpFeeResult {
     pub errors: Vec<String>,
 }
 
+#[derive(Deserialize, Clone, Debug)]
+#[serde(rename_all = "camelCase")]
+pub struct PsbtBumpFeeResult {
+    /// The base64-encoded unsigned PSBT of the new transaction. Only returned when wallet private
+    /// keys are disabled.
+    pub psbt: Option<String>,
+    /// The fee of the original transaction (before bumping), denominated in BTC.
+    pub origfee: f64,
+    /// The fee of the newly created bumped transaction, denominated in BTC.
+    pub fee: f64,
+    /// Errors encountered during processing.
+    pub errors: Vec<String>,
+}
+
 impl From<RpcError> for BitcoinRpcError {
     fn from(err: RpcError) -> Self {
         match num::FromPrimitive::from_i32(err.code) {
@@ -216,6 +231,8 @@ pub enum Error {
     InvalidRecipient,
     #[error("Hex decoding error: {0}")]
     HexDecodeError(#[from] hex::FromHexError),
+    #[error("Finalized PSBT did not return a raw transaction hex")]
+    MissingRawTxHex,
 }
 
 #[derive(Clone)]
@@ -454,6 +471,54 @@ impl BitcoinClient {
             Err(err) => Err(err.into()), // Handle the case where the RPC call fails
         }
     }
+
+    pub fn psbt_bump_fee(
+        &self,
+        txid: &Txid,
+        options: Option<&BumpFeeOptions>,
+    ) -> Result<PsbtBumpFeeResult, Error> {
+        // Serialize options if provided
+        let opts = match options {
+            Some(options) => Some(options.to_serializable(self.rpc.version()?)),
+            None => None,
+        };
+
+        // Prepare arguments
+        let args = vec![serde_json::to_value(txid)?, serde_json::to_value(opts)?];
+
+        // Call the "psbtbumpfee" RPC method
+        let result = self.rpc.call("psbtbumpfee", &args);
+
+        // Handle the result
+        match result {
+            Ok(result_value) => {
+                let result: Result<PsbtBumpFeeResult, _> = serde_json::from_value(result_value);
+                match result {
+                    Ok(bump_fee_result) => Ok(bump_fee_result),
+                    Err(err) => {
+                        println!("Failed to deserialize into PsbtBumpFeeResult");
+                        Err(err.into())
+                    }
+                }
+            }
+            Err(err) => Err(err.into()),
+        }
+    }
+
+    pub fn sign_and_finalize_psbt(
+        &self,
+        psbt: &str,
+        sign: Option<bool>,
+        sighash_type: Option<json::SigHashType>,
+        bip32derivs: Option<bool>,
+    ) -> Result<Transaction, Error> {
+        let wallet_process_psbt =
+            self.rpc.wallet_process_psbt(psbt, sign, sighash_type, bip32derivs)?;
+        let finalized = self.rpc.finalize_psbt(&wallet_process_psbt.psbt, Some(true))?;
+        let tx_bytes = finalized.hex.ok_or(Error::MissingRawTxHex)?;
+        let tx: Transaction = consensus::deserialize(&tx_bytes)?;
+        Ok(tx)
+    }
 }
 
 fn merklize(left: Sha256dHash, right: Sha256dHash) -> Sha256dHash {
diff --git a/crates/utils/src/bitcoin_core.rs b/crates/utils/src/bitcoin_core.rs
index 42fd7f22..c834c1ea 100644
--- a/crates/utils/src/bitcoin_core.rs
+++ b/crates/utils/src/bitcoin_core.rs
@@ -250,6 +250,82 @@ mod tests {
         );
     }
 
+    #[tokio::test]
+    async fn test_psbt_bump_fee() -> Result<()> {
+        // Step 1: Create and initialize BitcoinCore instance for test
+        let bitcoin = BitcoinCore::new().spawn();
+
+        // Fund Alice's wallet
+        bitcoin.fund_wallet("Alice").expect("Should fund Alice");
+
+        // Fund Bob's wallet
+        bitcoin.fund_wallet("Bob").expect("Should fund Alice");
+
+        // Check that Bob's balance is 5000000000 satoshis (i.e., 5 BTC)
+        assert_eq!(
+            bitcoin.client(Some("Bob")).unwrap().get_balance(None, None).unwrap().to_sat(),
+            5000000000
+        );
+
+        // Initialize BitcoinClient for Alice (make sure Alice's wallet is used)
+        let bitcoin_client = BitcoinClient::from(bitcoin.client(Some("Alice"))?);
+
+        let to_addr = bitcoin_client.rpc.get_new_address(None, None).unwrap().assume_checked();
+
+        // Set the amount to send
+        let amount = Amount::from_sat(100_000); // 0.001 BTC (adjust as necessary)
+
+        // Send the transaction (low fee expected)
+        let txid = bitcoin_client
+            .rpc
+            .send_to_address(&to_addr, amount, None, None, None, Some(true), None, None)
+            .unwrap();
+
+        // Step 3: Psbt Bump the fee for the low-fee transaction by calling bump_fee
+        let psbt_bump_fee = bitcoin_client
+            .psbt_bump_fee(
+                &txid,
+                Some(&BumpFeeOptions {
+                    conf_target: None,
+                    fee_rate: None,
+                    replaceable: Some(true), // Allow the transaction to be replaceable
+                    estimate_mode: None,
+                }),
+            )
+            .unwrap();
+
+        // the previous tx fee should be less than the newly created tx fee
+        assert!(psbt_bump_fee.origfee < psbt_bump_fee.fee);
+
+        // Sign and finalize the PSBT
+        let tx = bitcoin_client.sign_and_finalize_psbt(
+            &psbt_bump_fee.psbt.unwrap(),
+            None,
+            None,
+            None,
+        )?;
+
+        // broadcast the bumped fee transaction
+        bitcoin_client.validate_and_send_raw_transaction(&tx).unwrap();
+
+        // Step 4: Generate 100 blocks to confirm the bump fee transaction
+        bitcoin_client.rpc.generate_to_address(100, &to_addr).unwrap();
+
+        // Check the original transaction
+        let tx_info = bitcoin_client.rpc.get_transaction(&txid, None).unwrap();
+
+        // Assert that the original transaction has negative confirmations
+        assert!(tx_info.info.confirmations.is_negative());
+
+        // Get the psbt bumped fee transaction's
+        let tx_info = bitcoin_client.rpc.get_transaction(&tx.compute_txid(), None).unwrap();
+
+        // Assert that the psbt bumped fee transaction has confirmations
+        assert!(tx_info.info.confirmations.is_positive());
+
+        Ok(())
+    }
+
     #[tokio::test]
     async fn test_bump_fee() -> Result<()> {
         // Step 1: Create and initialize BitcoinCore instance for test