diff --git a/test/functional/mandatory_coinbase.py b/test/functional/mandatory_coinbase.py
new file mode 100755
index 0000000000..15b6fcc976
--- /dev/null
+++ b/test/functional/mandatory_coinbase.py
@@ -0,0 +1,90 @@
+#!/usr/bin/env python3
+# Copyright (c) 2014-2018 The Bitcoin Core developers
+# Distributed under the MIT software license, see the accompanying
+# file COPYING or http://www.opensource.org/licenses/mit-license.php.
+"""Test mining RPCs
+
+- getmininginfo
+- getblocktemplate proposal mode
+- submitblock"""
+
+from binascii import b2a_hex
+from decimal import Decimal
+
+from test_framework.blocktools import create_coinbase, create_block
+from test_framework.messages import CBlock
+from test_framework.test_framework import BitcoinTestFramework
+from test_framework.util import assert_equal, assert_raises_rpc_error
+
+from test_framework.script import (
+    CScript,
+    OP_TRUE,
+)
+
+mandatory_privkey = "cNaQCDwmmh4dS9LzCgVtyy1e1xjCJ21GUDHe9K98nzb689JvinGV"
+mandatory_address = "n3NkSZqoPMCQN5FENxUBw4qVATbytH6FDK"
+mandatory_pubkey = "02fcba7ecf41bc7e1be4ee122d9d22e3333671eb0a3a87b5cdf099d59874e1940f"
+mandatory_script = "76a914efc58b838b3153174bf3d1677b7213353a4dccfd88ac"
+
+def b2x(b):
+    return b2a_hex(b).decode('ascii')
+
+def assert_template(node, block, expect, rehash=True):
+    if rehash:
+        block.hashMerkleRoot = block.calc_merkle_root()
+    rsp = node.getblocktemplate({'data': b2x(block.serialize()), 'mode': 'proposal'})
+    assert_equal(rsp, expect)
+
+class MandatoryCoinbaseTest(BitcoinTestFramework):
+    def set_test_params(self):
+        self.num_nodes = 2
+        self.setup_clean_chain = True
+        # Non-zero coinbase outputs *must* match this. Not setting it means anything is allowed
+        self.extra_args = [["-con_mandatorycoinbase="+mandatory_script], []]
+
+    def run_test(self):
+        node0 = self.nodes[0]
+        node1 = self.nodes[1]
+
+        node0.importprivkey(mandatory_privkey)
+
+        self.log.info("generatetoaddress: Making blocks of various kinds, checking for rejection")
+
+        # Create valid blocks to get out of IBD and get some funds (subsidy goes to permitted addr)
+        node0.generatetoaddress(101, mandatory_address)
+
+        # Generating for another address will not work
+        assert_raises_rpc_error(-1, "CreateNewBlock: TestBlockValidity failed: bad-coinbase-txos", node0.generatetoaddress, 1, node0.getnewaddress())
+
+        # Have non-mandatory node make a template
+        self.sync_all()
+        tmpl = node1.getblocktemplate()
+
+        # We make a block with OP_TRUE coinbase output that will fail on node0
+        coinbase_tx = create_coinbase(height=int(tmpl["height"]) + 1)
+        # sequence numbers must not be max for nLockTime to have effect
+        coinbase_tx.vin[0].nSequence = 2 ** 32 - 2
+        coinbase_tx.rehash()
+
+        block = CBlock()
+        block.nVersion = tmpl["version"]
+        block.hashPrevBlock = int(tmpl["previousblockhash"], 16)
+        block.nTime = tmpl["curtime"]
+        block.nBits = int(tmpl["bits"], 16)
+        block.nNonce = 0
+        block.vtx = [coinbase_tx]
+
+        self.log.info("getblocktemplate: Test block on both nodes")
+        assert_equal(node0.submitblock(b2x(block.serialize())), 'invalid')
+        assert_template(node1, block, None)
+
+        self.log.info("getblocktemplate: Test non-subsidy block on both nodes")
+        # Without block reward anything goes, this allows commitment outputs like segwit
+        coinbase_tx.vout[0].nValue = 0
+        coinbase_tx.rehash()
+        block.vtx = [coinbase_tx]
+        assert_template(node0, block, None)
+        assert_template(node1, block, None)
+
+if __name__ == '__main__':
+    MandatoryCoinbaseTest().main()