diff --git a/src/config.rs b/src/config.rs
index d23128e91..a9cf5bd48 100644
--- a/src/config.rs
+++ b/src/config.rs
@@ -7,7 +7,7 @@ use std::path::{Path, PathBuf};
 use std::sync::Arc;
 use stderrlog;
 
-use crate::chain::Network;
+use crate::chain::{Network, Txid};
 use crate::daemon::CookieGetter;
 use crate::errors::*;
 
@@ -71,6 +71,8 @@ pub struct Config {
     pub parent_network: BNetwork,
     #[cfg(feature = "liquid")]
     pub asset_db_path: Option<PathBuf>,
+    #[cfg(feature = "liquid")]
+    pub initial_issuance_prevout: Option<Txid>,
 
     #[cfg(feature = "electrum-discovery")]
     pub electrum_public_hosts: Option<crate::electrum::ServerHosts>,
@@ -279,6 +281,12 @@ impl Config {
                     .long("asset-db-path")
                     .help("Directory for liquid/elements asset db")
                     .takes_value(true),
+            )
+            .arg(
+                Arg::with_name("initial_issuance_prevout")
+                    .long("initial-issuance-prevout")
+                    .help("Custom initial issuance prevout TXID (required for custom liquid testnets/signets)")
+                    .takes_value(true),
             );
 
         #[cfg(feature = "electrum-discovery")]
@@ -318,6 +326,12 @@ impl Config {
         #[cfg(feature = "liquid")]
         let asset_db_path = m.value_of("asset_db_path").map(PathBuf::from);
 
+        #[cfg(feature = "liquid")]
+        let initial_issuance_prevout = m.value_of("initial_issuance_prevout").map(|s| {
+            s.parse::<Txid>()
+                .expect("invalid initial-issuance-prevout TXID")
+        });
+
         let default_daemon_port = match network_type {
             #[cfg(not(feature = "liquid"))]
             Network::Bitcoin => 8332,
@@ -497,6 +511,8 @@ impl Config {
             parent_network,
             #[cfg(feature = "liquid")]
             asset_db_path,
+            #[cfg(feature = "liquid")]
+            initial_issuance_prevout,
 
             #[cfg(feature = "electrum-discovery")]
             electrum_public_hosts,
@@ -505,6 +521,12 @@ impl Config {
             #[cfg(feature = "electrum-discovery")]
             tor_proxy: m.value_of("tor_proxy").map(|s| s.parse().unwrap()),
         };
+
+        #[cfg(feature = "liquid")]
+        if let Some(txid) = config.initial_issuance_prevout {
+            crate::util::transaction::set_custom_initial_issuance_prevout(txid);
+        }
+
         eprintln!("{:?}", config);
         config
     }
diff --git a/src/util/mod.rs b/src/util/mod.rs
index d5e8f1be8..179ed989c 100644
--- a/src/util/mod.rs
+++ b/src/util/mod.rs
@@ -1,6 +1,6 @@
 mod block;
 mod script;
-mod transaction;
+pub mod transaction;
 
 pub mod bincode;
 pub mod electrum_merkle;
diff --git a/src/util/transaction.rs b/src/util/transaction.rs
index c63e070e0..910f1dea8 100644
--- a/src/util/transaction.rs
+++ b/src/util/transaction.rs
@@ -3,6 +3,9 @@ use crate::util::BlockId;
 
 use std::collections::{BTreeSet, HashMap};
 
+#[cfg(feature = "liquid")]
+use std::sync::RwLock;
+
 #[cfg(feature = "liquid")]
 lazy_static! {
     static ref REGTEST_INITIAL_ISSUANCE_PREVOUT: Txid =
@@ -13,6 +16,14 @@ lazy_static! {
         "0c52d2526a5c9f00e9fb74afd15dd3caaf17c823159a514f929ae25193a43a52"
             .parse()
             .unwrap();
+    // Ref. https://github.com/Blockstream/electrs/issues/125
+    static ref CUSTOM_INITIAL_ISSUANCE_PREVOUT: RwLock<Option<Txid>> = RwLock::new(None);
+}
+
+#[cfg(feature = "liquid")]
+pub fn set_custom_initial_issuance_prevout(txid: Txid) {
+    let mut lock = CUSTOM_INITIAL_ISSUANCE_PREVOUT.write().unwrap();
+    *lock = Some(txid);
 }
 
 #[derive(Serialize, Deserialize, Debug)]
@@ -77,11 +88,27 @@ pub fn is_coinbase(txin: &TxIn) -> bool {
 pub fn has_prevout(txin: &TxIn) -> bool {
     #[cfg(not(feature = "liquid"))]
     return !txin.previous_output.is_null();
+
     #[cfg(feature = "liquid")]
-    return !txin.is_coinbase()
-        && !txin.is_pegin
-        && txin.previous_output.txid != *REGTEST_INITIAL_ISSUANCE_PREVOUT
-        && txin.previous_output.txid != *TESTNET_INITIAL_ISSUANCE_PREVOUT;
+    {
+        // 1. Check standard liquid conditions
+        if txin.is_coinbase() || txin.is_pegin {
+            return false;
+        }
+
+        // 2. Check against the CUSTOM dummy prevout passed from Config
+        if let Ok(lock) = CUSTOM_INITIAL_ISSUANCE_PREVOUT.read() {
+            if let Some(custom_txid) = *lock {
+                if txin.previous_output.txid == custom_txid {
+                    return false; // Ignore this input!
+                }
+            }
+        }
+
+        // 3. Check against hardcoded defaults
+        return txin.previous_output.txid != *REGTEST_INITIAL_ISSUANCE_PREVOUT
+            && txin.previous_output.txid != *TESTNET_INITIAL_ISSUANCE_PREVOUT;
+    }
 }
 
 pub fn is_spendable(txout: &TxOut) -> bool {
@@ -203,4 +230,4 @@ mod test {
             Some(value)
         );
     }
-}
+}
\ No newline at end of file