diff --git a/CHANGELOG.md b/CHANGELOG.md
index 27a12dfd9a..54a6b6c18a 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -189,6 +189,7 @@ Ref: https://keepachangelog.com/en/1.0.0/
 * [\#10593](https://github.com/cosmos/cosmos-sdk/pull/10593) Update swagger-ui to v4.1.0 to fix xss vulnerability.
 * [\#10674](https://github.com/cosmos/cosmos-sdk/pull/10674) Fix issue with `Error.Wrap` and `Error.Wrapf` usage with `errors.Is`.
 * [\#10897](https://github.com/cosmos/cosmos-sdk/pull/10897) Fix: set a non-zero value on gas overflow.
+* [#9790](https://github.com/cosmos/cosmos-sdk/pull/10687) Fix behavior of `DecCoins.MulDecTruncate`.
 
 ### State Machine Breaking
 
diff --git a/types/dec_coin.go b/types/dec_coin.go
index 74a5a1ae44..bb32ef653a 100644
--- a/types/dec_coin.go
+++ b/types/dec_coin.go
@@ -373,12 +373,15 @@ func (coins DecCoins) MulDec(d Dec) DecCoins {
 }
 
 // MulDecTruncate multiplies all the decimal coins by a decimal, truncating. It
-// panics if d is zero.
+// returns nil DecCoins if d is zero.
 //
 // CONTRACT: No zero coins will be returned.
 func (coins DecCoins) MulDecTruncate(d Dec) DecCoins {
-	var res DecCoins
+	if d.IsZero() {
+		return DecCoins{}
+	}
 
+	var res DecCoins
 	for _, coin := range coins {
 		product := DecCoin{
 			Denom:  coin.Denom,
diff --git a/types/dec_coin_test.go b/types/dec_coin_test.go
index 2f35075d3c..52f50d24fc 100644
--- a/types/dec_coin_test.go
+++ b/types/dec_coin_test.go
@@ -880,12 +880,10 @@ func (s *decCoinTestSuite) TestDecCoins_MulDecTruncate() {
 	}{
 		{"No Coins", sdk.DecCoins{}, sdk.NewDec(1), sdk.DecCoins(nil), false},
 
-		// TODO - Fix test - Function comment documentation for MulDecTruncate says if multiplier d is zero, it should panic.
-		// However, that is not the observed behaviour. Currently nil is returned.
 		{"Multiple coins - zero multiplier", sdk.DecCoins{
 			sdk.DecCoin{testDenom1, sdk.NewDecWithPrec(10, 3)},
 			sdk.DecCoin{testDenom1, sdk.NewDecWithPrec(30, 2)},
-		}, sdk.NewDec(0), sdk.DecCoins(nil), false},
+		}, sdk.NewDec(0), sdk.DecCoins{}, false},
 
 		{"Multiple coins - positive multiplier", sdk.DecCoins{
 			sdk.DecCoin{testDenom1, sdk.NewDecWithPrec(15, 1)},