diff --git a/app/app.go b/app/app.go
index b4db528842..b929268456 100644
--- a/app/app.go
+++ b/app/app.go
@@ -563,9 +563,10 @@ func NewWasmApp(
 	icaHostStack = ibcfee.NewIBCMiddleware(icaHostStack, app.IBCFeeKeeper)
 
 	// Create fee enabled wasm ibc Stack
-	var wasmStack porttypes.IBCModule
+	var wasmStack porttypes.IBCModule //nolint:gosimple
 	wasmStack = wasm.NewIBCHandler(app.WasmKeeper, app.IBCKeeper.ChannelKeeper)
-	wasmStack = ibcfee.NewIBCMiddleware(wasmStack, app.IBCFeeKeeper)
+	// Note: IBC29 fee middleware is currently not supported due to version decoding issues in wasm/ibc.go
+	// wasmStack = ibcfee.NewIBCMiddleware(wasmStack, app.IBCFeeKeeper)
 
 	// Create static IBC router, add app routes, then set and seal it
 	ibcRouter := porttypes.NewRouter().
diff --git a/tests/e2e/ibc_fees_test.go b/tests/e2e/ibc_fees_test.go
index fa315ffe60..ef3b89d3c8 100644
--- a/tests/e2e/ibc_fees_test.go
+++ b/tests/e2e/ibc_fees_test.go
@@ -106,6 +106,7 @@ func TestIBCFeesTransfer(t *testing.T) {
 }
 
 func TestIBCFeesWasm(t *testing.T) {
+	t.Skip("Deactivated until ibc middleware is setup for wasm")
 	// scenario:
 	// given 2 chains with cw20-ibc on chain A and native ics20 module on B
 	//   and an ibc channel established
diff --git a/x/wasm/ibc.go b/x/wasm/ibc.go
index 489e3e7ef8..e98206a3f5 100644
--- a/x/wasm/ibc.go
+++ b/x/wasm/ibc.go
@@ -2,13 +2,11 @@ package wasm
 
 import (
 	"math"
-	"strings"
 
 	wasmvmtypes "github.com/CosmWasm/wasmvm/types"
 	sdk "github.com/cosmos/cosmos-sdk/types"
 	sdkerrors "github.com/cosmos/cosmos-sdk/types/errors"
 	capabilitytypes "github.com/cosmos/cosmos-sdk/x/capability/types"
-	ibcfees "github.com/cosmos/ibc-go/v4/modules/apps/29-fee/types"
 	channeltypes "github.com/cosmos/ibc-go/v4/modules/core/04-channel/types"
 	porttypes "github.com/cosmos/ibc-go/v4/modules/core/05-port/types"
 	host "github.com/cosmos/ibc-go/v4/modules/core/24-host"
@@ -230,19 +228,11 @@ func (i IBCHandler) OnChanCloseConfirm(ctx sdk.Context, portID, channelID string
 }
 
 func toWasmVMChannel(portID, channelID string, channelInfo channeltypes.Channel) wasmvmtypes.IBCChannel {
-	version := channelInfo.Version
-	if strings.TrimSpace(version) != "" {
-		// check for ics-29 middleware versions
-		var versionMetadata ibcfees.Metadata
-		if err := types.ModuleCdc.UnmarshalJSON([]byte(channelInfo.Version), &versionMetadata); err == nil {
-			version = versionMetadata.AppVersion
-		}
-	}
 	return wasmvmtypes.IBCChannel{
 		Endpoint:             wasmvmtypes.IBCEndpoint{PortID: portID, ChannelID: channelID},
 		CounterpartyEndpoint: wasmvmtypes.IBCEndpoint{PortID: channelInfo.Counterparty.PortId, ChannelID: channelInfo.Counterparty.ChannelId},
 		Order:                channelInfo.Ordering.String(),
-		Version:              version,
+		Version:              channelInfo.Version,           // this is the raw version and will cause issues when overloaded in ibc middleware
 		ConnectionID:         channelInfo.ConnectionHops[0], // At the moment this list must be of length 1. In the future multi-hop channels may be supported.
 	}
 }