diff --git a/packages/bcp/src/encode.ts b/packages/bcp/src/encode.ts
index 94288c48..164fb867 100644
--- a/packages/bcp/src/encode.ts
+++ b/packages/bcp/src/encode.ts
@@ -1,5 +1,5 @@
 /* eslint-disable @typescript-eslint/camelcase */
-import { types } from "@cosmwasm/sdk";
+import { encodeSecp256k1Signature, types } from "@cosmwasm/sdk";
 import {
   Algorithm,
   Amount,
@@ -10,7 +10,6 @@ import {
   SignedTransaction,
   UnsignedTransaction,
 } from "@iov/bcp";
-import { Secp256k1 } from "@iov/crypto";
 import { Decimal, Encoding } from "@iov/encoding";
 
 import { TokenInfos } from "./types";
@@ -72,14 +71,12 @@ export function encodeFee(fee: Fee, tokens: TokenInfos): types.StdFee {
 }
 
 export function encodeFullSignature(fullSignature: FullSignature): types.StdSignature {
-  return {
-    pub_key: {
-      type: "tendermint/PubKeySecp256k1",
-      value: toBase64(Secp256k1.compressPubkey(fullSignature.pubkey.data)),
-    },
-    // Recovery seems to be unused
-    signature: toBase64(Secp256k1.trimRecoveryByte(fullSignature.signature)),
-  };
+  switch (fullSignature.pubkey.algo) {
+    case Algorithm.Secp256k1:
+      return encodeSecp256k1Signature(fullSignature.pubkey.data, fullSignature.signature);
+    default:
+      throw new Error("Unsupported signing algorithm");
+  }
 }
 
 export function buildUnsignedTx(tx: UnsignedTransaction, tokens: TokenInfos): types.AminoTx {
diff --git a/packages/sdk/package.json b/packages/sdk/package.json
index 12243e6f..3c5016b9 100644
--- a/packages/sdk/package.json
+++ b/packages/sdk/package.json
@@ -38,6 +38,7 @@
     "pack-web": "yarn build-or-skip && webpack --mode development --config webpack.web.config.js"
   },
   "dependencies": {
+    "@iov/crypto": "^2.0.0-alpha.7",
     "@iov/encoding": "^2.0.0-alpha.7",
     "axios": "^0.19.0"
   },
diff --git a/packages/sdk/src/encoding.spec.ts b/packages/sdk/src/encoding.spec.ts
new file mode 100644
index 00000000..6aeb8f61
--- /dev/null
+++ b/packages/sdk/src/encoding.spec.ts
@@ -0,0 +1,59 @@
+import { Encoding } from "@iov/encoding";
+
+import { encodeSecp256k1Signature } from "./encoding";
+
+const { fromBase64 } = Encoding;
+
+describe("encoding", () => {
+  describe("encodeSecp256k1Signature", () => {
+    it("encodes a full signature", () => {
+      const pubkey = fromBase64("AtQaCqFnshaZQp6rIkvAPyzThvCvXSDO+9AzbxVErqJP");
+      const signature = fromBase64(
+        "1nUcIH0CLT0/nQ0mBTDrT6kMG20NY/PsH7P2gc4bpYNGLEYjBmdWevXUJouSE/9A/60QG9cYeqyTe5kFDeIPxQ==",
+      );
+      expect(encodeSecp256k1Signature(pubkey, signature)).toEqual({
+        // eslint-disable-next-line @typescript-eslint/camelcase
+        pub_key: {
+          type: "tendermint/PubKeySecp256k1",
+          value: "AtQaCqFnshaZQp6rIkvAPyzThvCvXSDO+9AzbxVErqJP",
+        },
+        signature: "1nUcIH0CLT0/nQ0mBTDrT6kMG20NY/PsH7P2gc4bpYNGLEYjBmdWevXUJouSE/9A/60QG9cYeqyTe5kFDeIPxQ==",
+      });
+    });
+
+    it("compresses uncompressed public keys", () => {
+      const pubkey = fromBase64(
+        "BE8EGB7ro1ORuFhjOnZcSgwYlpe0DSFjVNUIkNNQxwKQE7WHpoHoNswYeoFkuYpYSKK4mzFzMV/dB0DVAy4lnNU=",
+      );
+      const signature = fromBase64(
+        "1nUcIH0CLT0/nQ0mBTDrT6kMG20NY/PsH7P2gc4bpYNGLEYjBmdWevXUJouSE/9A/60QG9cYeqyTe5kFDeIPxQ==",
+      );
+      expect(encodeSecp256k1Signature(pubkey, signature)).toEqual({
+        // eslint-disable-next-line @typescript-eslint/camelcase
+        pub_key: {
+          type: "tendermint/PubKeySecp256k1",
+          value: "A08EGB7ro1ORuFhjOnZcSgwYlpe0DSFjVNUIkNNQxwKQ",
+        },
+        signature: "1nUcIH0CLT0/nQ0mBTDrT6kMG20NY/PsH7P2gc4bpYNGLEYjBmdWevXUJouSE/9A/60QG9cYeqyTe5kFDeIPxQ==",
+      });
+    });
+
+    it("removes recovery values from signature data", () => {
+      const pubkey = fromBase64("AtQaCqFnshaZQp6rIkvAPyzThvCvXSDO+9AzbxVErqJP");
+      const signature = Uint8Array.from([
+        ...fromBase64(
+          "1nUcIH0CLT0/nQ0mBTDrT6kMG20NY/PsH7P2gc4bpYNGLEYjBmdWevXUJouSE/9A/60QG9cYeqyTe5kFDeIPxQ==",
+        ),
+        99,
+      ]);
+      expect(encodeSecp256k1Signature(pubkey, signature)).toEqual({
+        // eslint-disable-next-line @typescript-eslint/camelcase
+        pub_key: {
+          type: "tendermint/PubKeySecp256k1",
+          value: "AtQaCqFnshaZQp6rIkvAPyzThvCvXSDO+9AzbxVErqJP",
+        },
+        signature: "1nUcIH0CLT0/nQ0mBTDrT6kMG20NY/PsH7P2gc4bpYNGLEYjBmdWevXUJouSE/9A/60QG9cYeqyTe5kFDeIPxQ==",
+      });
+    });
+  });
+});
diff --git a/packages/sdk/src/encoding.ts b/packages/sdk/src/encoding.ts
index 3cee29af..8f10a78d 100644
--- a/packages/sdk/src/encoding.ts
+++ b/packages/sdk/src/encoding.ts
@@ -1,6 +1,9 @@
+import { Secp256k1 } from "@iov/crypto";
 import { Encoding } from "@iov/encoding";
 
-import { StdTx } from "./types";
+import { StdSignature, StdTx } from "./types";
+
+const { toBase64 } = Encoding;
 
 export function sortJson(json: any): any {
   if (typeof json !== "object" || json === null) {
@@ -24,3 +27,15 @@ export function marshalTx(tx: StdTx): Uint8Array {
   const json = JSON.stringify(tx);
   return Encoding.toUtf8(json);
 }
+
+export function encodeSecp256k1Signature(pubkey: Uint8Array, signature: Uint8Array): StdSignature {
+  return {
+    // eslint-disable-next-line @typescript-eslint/camelcase
+    pub_key: {
+      type: "tendermint/PubKeySecp256k1",
+      value: toBase64(Secp256k1.compressPubkey(pubkey)),
+    },
+    // Recovery seems to be unused
+    signature: toBase64(Secp256k1.trimRecoveryByte(signature)),
+  };
+}
diff --git a/packages/sdk/src/index.ts b/packages/sdk/src/index.ts
index 23e94da1..1a2e024c 100644
--- a/packages/sdk/src/index.ts
+++ b/packages/sdk/src/index.ts
@@ -1,6 +1,6 @@
 import * as types from "./types";
 
 export { unmarshalTx } from "./decoding";
-export { marshalTx, sortJson } from "./encoding";
+export { encodeSecp256k1Signature, marshalTx, sortJson } from "./encoding";
 export { RestClient, TxsResponse } from "./restclient";
 export { types };
diff --git a/packages/sdk/src/restclient.spec.ts b/packages/sdk/src/restclient.spec.ts
index ed843e87..f6febb93 100644
--- a/packages/sdk/src/restclient.spec.ts
+++ b/packages/sdk/src/restclient.spec.ts
@@ -1,16 +1,15 @@
 /* eslint-disable @typescript-eslint/camelcase */
 import { ChainId, PrehashType, SignableBytes } from "@iov/bcp";
-import { Secp256k1 } from "@iov/crypto";
 import { Encoding } from "@iov/encoding";
 import { HdPaths, Secp256k1HdWallet } from "@iov/keycontrol";
 
-import { marshalTx, sortJson } from "./encoding";
+import { encodeSecp256k1Signature, marshalTx, sortJson } from "./encoding";
 import { RestClient } from "./restclient";
 import contract from "./testdata/contract.json";
 import data from "./testdata/cosmoshub.json";
-import { MsgStoreCodeWrapped, StdSignature, StdTx } from "./types";
+import { MsgStoreCodeWrapped, StdTx } from "./types";
 
-const { fromBase64, toBase64, toUtf8 } = Encoding;
+const { fromBase64, toUtf8 } = Encoding;
 
 const httpUrl = "http://localhost:1317";
 const defaultNetworkId = "testing";
@@ -105,21 +104,14 @@ describe("RestClient", () => {
       });
 
       const signBytes = toUtf8(JSON.stringify(signMsg)) as SignableBytes;
-      const signature = await wallet.createTransactionSignature(signer, signBytes, PrehashType.Sha256);
-      const fullSignature: StdSignature = {
-        pub_key: {
-          type: "tendermint/PubKeySecp256k1",
-          value: toBase64(Secp256k1.compressPubkey(signer.pubkey.data)),
-        },
-        // Recovery seems to be unused
-        signature: toBase64(Secp256k1.trimRecoveryByte(signature)),
-      };
+      const rawSignature = await wallet.createTransactionSignature(signer, signBytes, PrehashType.Sha256);
+      const signature = encodeSecp256k1Signature(signer.pubkey.data, rawSignature);
 
       const tx: StdTx = {
         msg: unsigned.msg,
         fee: unsigned.fee,
         memo: memo,
-        signatures: [fullSignature],
+        signatures: [signature],
       };
 
       const postableBytes = marshalTx(tx);
diff --git a/packages/sdk/types/encoding.d.ts b/packages/sdk/types/encoding.d.ts
index 591bdbb4..22972faf 100644
--- a/packages/sdk/types/encoding.d.ts
+++ b/packages/sdk/types/encoding.d.ts
@@ -1,3 +1,4 @@
-import { StdTx } from "./types";
+import { StdSignature, StdTx } from "./types";
 export declare function sortJson(json: any): any;
 export declare function marshalTx(tx: StdTx): Uint8Array;
+export declare function encodeSecp256k1Signature(pubkey: Uint8Array, signature: Uint8Array): StdSignature;
diff --git a/packages/sdk/types/index.d.ts b/packages/sdk/types/index.d.ts
index 0c6dcc71..cddb9250 100644
--- a/packages/sdk/types/index.d.ts
+++ b/packages/sdk/types/index.d.ts
@@ -1,5 +1,5 @@
 import * as types from "./types";
 export { unmarshalTx } from "./decoding";
-export { marshalTx, sortJson } from "./encoding";
+export { encodeSecp256k1Signature, marshalTx, sortJson } from "./encoding";
 export { RestClient, TxsResponse } from "./restclient";
 export { types };