diff --git a/client/config/config.go b/client/config/config.go
index d247927c6e55a..e3a2a8646d939 100644
--- a/client/config/config.go
+++ b/client/config/config.go
@@ -46,6 +46,26 @@ func (c *ClientConfig) SetBroadcastMode(broadcastMode string) {
 	c.BroadcastMode = broadcastMode
 }
 
+// ReadDefaultValuesFromDefaultClientConfig reads default values from default client.toml file and updates them in client.Context
+// The client.toml is then discarded.
+func ReadDefaultValuesFromDefaultClientConfig(ctx client.Context) (client.Context, error) {
+	prevHomeDir := ctx.HomeDir
+	dir, err := os.MkdirTemp("", "simapp")
+	if err != nil {
+		return ctx, fmt.Errorf("couldn't create temp dir: %w", err)
+	}
+	defer os.RemoveAll(dir)
+
+	ctx.HomeDir = dir
+	ctx, err = ReadFromClientConfig(ctx)
+	if err != nil {
+		return ctx, fmt.Errorf("couldn't create client config: %w", err)
+	}
+
+	ctx.HomeDir = prevHomeDir
+	return ctx, nil
+}
+
 // ReadFromClientConfig reads values from client.toml file and updates them in client Context
 func ReadFromClientConfig(ctx client.Context) (client.Context, error) {
 	configPath := filepath.Join(ctx.HomeDir, "config")
diff --git a/simapp/simd/cmd/root.go b/simapp/simd/cmd/root.go
index 7260f000c39f5..5e54ab06c6fc6 100644
--- a/simapp/simd/cmd/root.go
+++ b/simapp/simd/cmd/root.go
@@ -100,7 +100,7 @@ func NewRootCmd() *cobra.Command {
 
 	// add keyring to autocli opts
 	autoCliOpts := tempApp.AutoCliOpts()
-	initClientCtx, _ = config.ReadFromClientConfig(initClientCtx)
+	initClientCtx, _ = config.ReadDefaultValuesFromDefaultClientConfig(initClientCtx)
 	autoCliOpts.Keyring, _ = keyring.NewAutoCLIKeyring(initClientCtx.Keyring)
 	autoCliOpts.ClientCtx = initClientCtx
 
diff --git a/simapp/simd/cmd/root_v2.go b/simapp/simd/cmd/root_v2.go
index e6512b452352c..dd66814723730 100644
--- a/simapp/simd/cmd/root_v2.go
+++ b/simapp/simd/cmd/root_v2.go
@@ -109,7 +109,7 @@ func ProvideClientContext(
 		WithViper("") // In simapp, we don't use any prefix for env variables.
 
 	// Read the config again to overwrite the default values with the values from the config file
-	clientCtx, _ = config.ReadFromClientConfig(clientCtx)
+	clientCtx, _ = config.ReadDefaultValuesFromDefaultClientConfig(clientCtx)
 
 	// re-create the tx config grpc instead of bank keeper
 	txConfigOpts.TextualCoinMetadataQueryFn = authtxconfig.NewGRPCCoinMetadataQueryFn(clientCtx)