diff --git a/.github/workflows/regtest.yml b/.github/workflows/regtest.yml
index 17a03a453..53d0b95b6 100644
--- a/.github/workflows/regtest.yml
+++ b/.github/workflows/regtest.yml
@@ -66,6 +66,7 @@ jobs:
           BOLTZ_MNEMONIC: abandon abandon abandon abandon abandon abandon abandon abandon abandon abandon abandon about
           LNBITS_MAX_OUTGOING_PAYMENT_AMOUNT_SATS: 1000000000
           LNBITS_MAX_INCOMING_PAYMENT_AMOUNT_SATS: 1000000000
+          LNBITS_FUNDING_SOURCE_PAY_INVOICE_WAIT_SECONDS: ${{ inputs.backend-wallet-class == 'CoreLightningRestWallet' && 60 || 5 }}
           ECLAIR_PASS: lnbits
           PYTHONUNBUFFERED: 1
           DEBUG: true
diff --git a/lnbits/utils/electrum.py b/lnbits/utils/electrum.py
new file mode 100644
index 000000000..fd9a4b196
--- /dev/null
+++ b/lnbits/utils/electrum.py
@@ -0,0 +1,439 @@
+"""
+Electrum protocol client (https://github.com/spesmilo/electrum-protocol).
+
+JSON-RPC 2.0 over TCP / SSL (newline-delimited), with request/response
+correlation, subscription dispatch, and automatic keepalive pings.
+server.version is sent automatically on connect as required by the spec.
+"""
+
+import asyncio
+import hashlib
+import itertools
+import json
+import ssl
+from collections.abc import Callable
+from typing import Any
+from urllib.parse import urlparse
+
+from loguru import logger
+from pydantic import BaseModel
+
+
+class ElectrumError(Exception):
+    pass
+
+
+def scripthash_from_scriptpubkey(scriptpubkey: bytes) -> str:
+    """Electrum script hash: SHA-256 of scriptPubKey, byte-reversed to hex."""
+    return hashlib.sha256(scriptpubkey).digest()[::-1].hex()
+
+
+# ---------------------------------------------------------------------------
+# Response models
+# ---------------------------------------------------------------------------
+
+
+class Balance(BaseModel):
+    confirmed: int
+    unconfirmed: int
+
+
+class HistoryEntry(BaseModel):
+    tx_hash: str
+    height: int
+    fee: int | None = None  # present for mempool entries
+
+
+class MempoolEntry(BaseModel):
+    tx_hash: str
+    height: int
+    fee: int
+
+
+class UTXO(BaseModel):
+    tx_hash: str
+    tx_pos: int
+    height: int
+    value: int  # satoshis
+
+
+class BlockHeader(BaseModel):
+    height: int
+    hex: str
+
+
+class BlockHeaderProof(BaseModel):
+    """Returned by get_block_header when cp_height > 0."""
+
+    branch: list[str]
+    header: str
+    root: str
+
+
+class BlockHeaders(BaseModel):
+    count: int
+    hex: str
+    max: int
+
+
+class MerkleProof(BaseModel):
+    block_height: int
+    merkle: list[str]
+    pos: int
+
+
+class TxIdWithMerkle(BaseModel):
+    tx_hash: str
+    merkle: list[str]
+
+
+class FeeHistogramEntry(BaseModel):
+    fee_rate: float
+    vsize: float
+
+
+class ServerFeatures(BaseModel):
+    class Config:
+        extra = "allow"
+
+    genesis_hash: str = ""
+    protocol_max: str = ""
+    protocol_min: str = ""
+    server_version: str = ""
+    pruning: int | None = None
+    hash_function: str = "sha256d"
+    hosts: dict[str, Any] = {}
+
+
+# ---------------------------------------------------------------------------
+# Client
+# ---------------------------------------------------------------------------
+
+
+class ElectrumClient:
+    """
+    Async Electrum protocol client over plain TCP or SSL.
+
+    Messages are newline-terminated JSON-RPC 2.0, as required by the spec.
+    Handles request/response correlation by id, routes push notifications to
+    registered callbacks, and sends periodic pings to keep the connection alive.
+
+    Usage::
+
+        # Plain TCP
+        async with ElectrumClient("tcp://blockstream.info:110") as client:
+            height = await client.get_height()
+
+        # SSL
+        async with ElectrumClient("ssl://electrum.blockstream.info:50002") as c:
+            height = await c.get_height()
+    """
+
+    def __init__(
+        self,
+        url: str,
+        client_name: str = "lnbits",
+        protocol_version: str = "1.4",
+        ping_interval: float = 60.0,
+    ) -> None:
+        parsed = urlparse(url)
+        self.host = parsed.hostname or ""
+        self.port = parsed.port or (
+            50002 if parsed.scheme in ("ssl", "https") else 50001
+        )
+        self.use_ssl = parsed.scheme in ("ssl", "https")
+        self.client_name = client_name
+        self.protocol_version = protocol_version
+        self.ping_interval = ping_interval
+        self._counter = itertools.count(1)
+        self._pending: dict[int, asyncio.Future[Any]] = {}
+        self._subscriptions: dict[str, list[Callable[[list[Any]], Any]]] = {}
+        self._recv_task: asyncio.Task[None] | None = None
+        self._ping_task: asyncio.Task[None] | None = None
+        self._reader: asyncio.StreamReader | None = None
+        self._writer: asyncio.StreamWriter | None = None
+        self.server_version: str = ""
+        self.negotiated_protocol: str = ""
+
+    async def connect(self, timeout: float = 10.0) -> None:
+        ssl_ctx: ssl.SSLContext | None = None
+        if self.use_ssl:
+            ssl_ctx = ssl.create_default_context()
+        self._reader, self._writer = await asyncio.wait_for(
+            asyncio.open_connection(
+                self.host, self.port, ssl=ssl_ctx, limit=4 * 1024 * 1024
+            ),
+            timeout=timeout,
+        )
+        self._recv_task = asyncio.create_task(self._recv_loop())
+        result = await self._call(
+            "server.version", [self.client_name, self.protocol_version], timeout=timeout
+        )
+        self.server_version, self.negotiated_protocol = result[0], result[1]
+        logger.debug(
+            f"Electrum connected: server={self.server_version}"
+            f" protocol={self.negotiated_protocol}"
+        )
+        if self.ping_interval > 0:
+            self._ping_task = asyncio.create_task(self._ping_loop())
+
+    async def close(self) -> None:
+        for task in (self._ping_task, self._recv_task):
+            if task:
+                task.cancel()
+                try:
+                    await task
+                except asyncio.CancelledError:
+                    pass
+                except Exception:
+                    logger.debug("Electrum: error while cancelling task")
+        self._ping_task = None
+        self._recv_task = None
+        if self._writer:
+            self._writer.close()
+            try:
+                await asyncio.wait_for(self._writer.wait_closed(), timeout=5.0)
+            except Exception:
+                logger.debug("Electrum: error while closing writer")
+        self._reader = None
+        self._writer = None
+
+    async def __aenter__(self) -> "ElectrumClient":
+        try:
+            await self.connect()
+        except BaseException:
+            await self.close()
+            raise
+        return self
+
+    async def __aexit__(self, *_: Any) -> None:
+        await self.close()
+
+    # ---- internal plumbing ----
+
+    async def _call(
+        self,
+        method: str,
+        params: list[Any] | dict[str, Any] | None = None,
+        timeout: float = 30.0,
+    ) -> Any:
+        if not self._writer:
+            raise ElectrumError("Not connected")
+        req_id = next(self._counter)
+        fut: asyncio.Future[Any] = asyncio.get_running_loop().create_future()
+        self._pending[req_id] = fut
+        self._writer.write(
+            json.dumps(
+                {
+                    "jsonrpc": "2.0",
+                    "id": req_id,
+                    "method": method,
+                    "params": params if params is not None else [],
+                }
+            ).encode()
+            + b"\n"
+        )
+        await self._writer.drain()
+        try:
+            return await asyncio.wait_for(asyncio.shield(fut), timeout=timeout)
+        except asyncio.TimeoutError as exc:
+            self._pending.pop(req_id, None)
+            raise ElectrumError(f"Timeout waiting for response to {method!r}") from exc
+
+    def _dispatch(self, msg: dict[str, Any]) -> None:
+        msg_id = msg.get("id")
+        if msg_id is not None:
+            fut = self._pending.pop(msg_id, None)
+            if fut and not fut.done():
+                err = msg.get("error")
+                if err:
+                    fut.set_exception(ElectrumError(err))
+                else:
+                    fut.set_result(msg.get("result"))
+        else:
+            method = msg.get("method", "")
+            params = msg.get("params", [])
+            for cb in list(self._subscriptions.get(method, [])):
+                try:
+                    result = cb(params)
+                    if asyncio.iscoroutine(result):
+                        self._bg_tasks.add(asyncio.create_task(result))
+                except Exception:
+                    logger.exception(f"Electrum: callback error for {method!r}")
+
+    async def _recv_loop(self) -> None:
+        assert self._reader
+        self._bg_tasks: set[asyncio.Task[Any]] = set()
+        buf = b""
+        try:
+            while True:
+                chunk = await self._reader.read(65536)
+                if not chunk:
+                    break
+                buf += chunk
+                while b"\n" in buf:
+                    line, buf = buf.split(b"\n", 1)
+                    if not line.strip():
+                        continue
+                    try:
+                        msg: dict[str, Any] = json.loads(line)
+                    except json.JSONDecodeError:
+                        logger.warning(f"Electrum: invalid JSON: {line!r}")
+                        continue
+                    self._dispatch(msg)
+        except asyncio.CancelledError:
+            pass
+        except Exception:
+            logger.exception("Electrum: recv loop error")
+        finally:
+            for fut in self._pending.values():
+                if not fut.done():
+                    fut.set_exception(ElectrumError("Connection closed"))
+            self._pending.clear()
+
+    async def _ping_loop(self) -> None:
+        try:
+            while True:
+                await asyncio.sleep(self.ping_interval)
+                await self._call("server.ping")
+        except asyncio.CancelledError:
+            pass
+        except Exception:
+            logger.exception("Electrum: ping loop error")
+
+    # ---- subscription management ----
+
+    def on(self, method: str, callback: Callable[[list[Any]], Any]) -> None:
+        """Register a notification callback for a subscription method."""
+        self._subscriptions.setdefault(method, []).append(callback)
+
+    def off(self, method: str, callback: Callable[[list[Any]], Any]) -> None:
+        """Remove a previously registered notification callback."""
+        cbs = self._subscriptions.get(method)
+        if cbs and callback in cbs:
+            cbs.remove(callback)
+
+    # ---- server methods ----
+
+    async def server_ping(self) -> None:
+        await self._call("server.ping")
+
+    async def server_banner(self) -> str:
+        return await self._call("server.banner")
+
+    async def server_features(self) -> ServerFeatures:
+        data = await self._call("server.features")
+        return ServerFeatures.parse_obj(data)
+
+    async def server_peers(self) -> list[Any]:
+        return await self._call("server.peers.subscribe")
+
+    # ---- scripthash methods ----
+
+    async def get_balance(self, scripthash: str) -> Balance:
+        data = await self._call("blockchain.scripthash.get_balance", [scripthash])
+        return Balance.parse_obj(data)
+
+    async def get_history(self, scripthash: str) -> list[HistoryEntry]:
+        data = await self._call("blockchain.scripthash.get_history", [scripthash])
+        return [HistoryEntry.parse_obj(e) for e in data]
+
+    async def get_mempool(self, scripthash: str) -> list[MempoolEntry]:
+        data = await self._call("blockchain.scripthash.get_mempool", [scripthash])
+        return [MempoolEntry.parse_obj(e) for e in data]
+
+    async def listunspent(self, scripthash: str) -> list[UTXO]:
+        data = await self._call("blockchain.scripthash.listunspent", [scripthash])
+        return [UTXO.parse_obj(e) for e in data]
+
+    async def subscribe_scripthash(
+        self,
+        scripthash: str,
+        callback: Callable[[list[Any]], Any] | None = None,
+    ) -> str | None:
+        """Subscribe to status changes; returns current status hash or None."""
+        if callback:
+            self.on("blockchain.scripthash.subscribe", callback)
+        return await self._call("blockchain.scripthash.subscribe", [scripthash])
+
+    async def unsubscribe_scripthash(
+        self,
+        scripthash: str,
+        callback: Callable[[list[Any]], Any] | None = None,
+    ) -> bool:
+        if callback:
+            self.off("blockchain.scripthash.subscribe", callback)
+        return await self._call("blockchain.scripthash.unsubscribe", [scripthash])
+
+    async def subscribe_headers(
+        self,
+        callback: Callable[[list[Any]], Any] | None = None,
+    ) -> BlockHeader:
+        """Subscribe to new block headers; returns current tip."""
+        if callback:
+            self.on("blockchain.headers.subscribe", callback)
+        data = await self._call("blockchain.headers.subscribe")
+        return BlockHeader.parse_obj(data)
+
+    # ---- transaction methods ----
+
+    async def broadcast(self, raw_tx: str) -> str:
+        """Broadcast a raw transaction hex; returns txid on success."""
+        return await self._call("blockchain.transaction.broadcast", [raw_tx])
+
+    async def get_transaction(
+        self, txid: str, verbose: bool = False
+    ) -> str | dict[str, Any]:
+        return await self._call("blockchain.transaction.get", [txid, verbose])
+
+    async def get_merkle(self, txid: str, height: int) -> MerkleProof:
+        data = await self._call("blockchain.transaction.get_merkle", [txid, height])
+        return MerkleProof.parse_obj(data)
+
+    async def get_tx_id_from_pos(
+        self, height: int, tx_pos: int, merkle: bool = False
+    ) -> str | TxIdWithMerkle:
+        data = await self._call(
+            "blockchain.transaction.id_from_pos", [height, tx_pos, merkle]
+        )
+        if isinstance(data, dict):
+            return TxIdWithMerkle.parse_obj(data)
+        return data
+
+    # ---- block methods ----
+
+    async def get_tip(self) -> BlockHeader:
+        """Returns current chain tip."""
+        data = await self._call("blockchain.headers.subscribe")
+        return BlockHeader.parse_obj(data)
+
+    async def get_height(self) -> int:
+        """Returns the current best block height."""
+        return (await self.get_tip()).height
+
+    async def get_block_header(
+        self, height: int, cp_height: int = 0
+    ) -> str | BlockHeaderProof:
+        data = await self._call("blockchain.block.header", [height, cp_height])
+        if isinstance(data, dict):
+            return BlockHeaderProof.parse_obj(data)
+        return data
+
+    async def get_block_headers(
+        self, start_height: int, count: int, cp_height: int = 0
+    ) -> BlockHeaders:
+        data = await self._call(
+            "blockchain.block.headers", [start_height, count, cp_height]
+        )
+        return BlockHeaders.parse_obj(data)
+
+    # ---- fee methods ----
+
+    async def estimate_fee(self, num_blocks: int) -> float:
+        """Returns estimated fee rate in BTC/kB for confirmation within num_blocks."""
+        return await self._call("blockchain.estimatefee", [num_blocks])
+
+    async def fee_histogram(self) -> list[FeeHistogramEntry]:
+        """Returns mempool fee histogram as FeeHistogramEntry(fee_rate, vsize) list."""
+        data = await self._call("mempool.get_fee_histogram")
+        return [FeeHistogramEntry(fee_rate=r[0], vsize=r[1]) for r in data]
diff --git a/tests/regtest/helpers.py b/tests/regtest/helpers.py
index b90a577a5..ca1327fea 100644
--- a/tests/regtest/helpers.py
+++ b/tests/regtest/helpers.py
@@ -26,8 +26,6 @@ docker_bitcoin_cli = [
     "exec",
     "lnbits-bitcoind-1",
     "bitcoin-cli",
-    "-rpcuser=lnbits",
-    "-rpcpassword=lnbits",
     "-regtest",
 ]
 
diff --git a/tests/regtest/test_electrum.py b/tests/regtest/test_electrum.py
new file mode 100644
index 000000000..57083a2c2
--- /dev/null
+++ b/tests/regtest/test_electrum.py
@@ -0,0 +1,184 @@
+"""
+Electrum client integration tests against the regtest electrs container.
+Requires the regtest docker-compose stack (docker/regtest/docker-compose.yml).
+electrs is exposed on localhost:19001 (plain TCP) and localhost:3002 (HTTP).
+"""
+
+import asyncio
+
+import httpx
+import pytest
+from loguru import logger
+
+from lnbits.utils.electrum import ElectrumClient, scripthash_from_scriptpubkey
+
+from .helpers import docker_bitcoin_cli, run_cmd, run_cmd_json
+
+ELECTRS_HOST = "localhost"
+ELECTRS_PORT = 19001
+ELECTRS_HTTP = "http://localhost:3002"
+
+
+def bitcoin_height() -> int:
+    return run_cmd_json([*docker_bitcoin_cli, "getblockchaininfo"])["blocks"]
+
+
+def mine_blocks(n: int = 1) -> int:
+    """Mine n blocks and return the new chain height."""
+    run_cmd([*docker_bitcoin_cli, "-generate", str(n)])
+    return bitcoin_height()
+
+
+def new_address() -> str:
+    return run_cmd([*docker_bitcoin_cli, "getnewaddress", "bech32"])
+
+
+def get_scriptpubkey(address: str) -> bytes:
+    info = run_cmd_json([*docker_bitcoin_cli, "getaddressinfo", address])
+    return bytes.fromhex(info["scriptPubKey"])
+
+
+def send_to_address(address: str, sats: int) -> str:
+    btc = f"{sats * 1e-8:.8f}"
+    return run_cmd([*docker_bitcoin_cli, "sendtoaddress", address, btc])
+
+
+async def wait_for_electrs(height: int, timeout: float = 15.0) -> None:
+    """Poll electrs HTTP until it has indexed up to `height`."""
+    loop = asyncio.get_running_loop()
+    deadline = loop.time() + timeout
+    async with httpx.AsyncClient() as http:
+        while loop.time() < deadline:
+            try:
+                r = await http.get(f"{ELECTRS_HTTP}/blocks/tip/height", timeout=2)
+                if int(r.text) >= height:
+                    return
+            except Exception:
+                logger.debug("electrs not ready yet")
+            await asyncio.sleep(0.25)
+    raise TimeoutError(f"electrs did not reach height {height} within {timeout}s")
+
+
+@pytest.fixture(scope="module", autouse=True)
+async def wait_after_electrum_tests():
+    yield
+    await asyncio.sleep(1)
+
+
+@pytest.mark.anyio
+async def test_connect_and_height():
+    async with ElectrumClient(f"tcp://{ELECTRS_HOST}:{ELECTRS_PORT}") as client:
+        before = await client.get_height()
+
+    target = mine_blocks(3)
+    await wait_for_electrs(target)
+
+    async with ElectrumClient(f"tcp://{ELECTRS_HOST}:{ELECTRS_PORT}") as client:
+        after = await client.get_height()
+
+    assert isinstance(before, int) and before >= 0
+    assert after == before + 3
+
+
+@pytest.mark.anyio
+async def test_get_tip():
+    async with ElectrumClient(f"tcp://{ELECTRS_HOST}:{ELECTRS_PORT}") as client:
+        tip = await client.get_tip()
+        assert isinstance(tip.height, int)
+        assert isinstance(tip.hex, str)
+        assert len(tip.hex) == 160  # 80-byte serialised header
+
+
+@pytest.mark.anyio
+async def test_server_banner():
+    async with ElectrumClient(f"tcp://{ELECTRS_HOST}:{ELECTRS_PORT}") as client:
+        banner = await client.server_banner()
+        assert isinstance(banner, str)
+
+
+@pytest.mark.anyio
+async def test_balance_after_payment():
+    address = new_address()
+    scripthash = scripthash_from_scriptpubkey(get_scriptpubkey(address))
+
+    async with ElectrumClient(f"tcp://{ELECTRS_HOST}:{ELECTRS_PORT}") as client:
+        empty = await client.get_balance(scripthash)
+        assert empty.confirmed == 0
+        assert empty.unconfirmed == 0
+
+    send_to_address(address, 500_000)
+    target = mine_blocks(1)
+    await wait_for_electrs(target)
+
+    async with ElectrumClient(f"tcp://{ELECTRS_HOST}:{ELECTRS_PORT}") as client:
+        confirmed = await client.get_balance(scripthash)
+        assert confirmed.confirmed == 500_000
+        assert confirmed.unconfirmed == 0
+
+
+@pytest.mark.anyio
+async def test_history_and_utxos():
+    address = new_address()
+    scripthash = scripthash_from_scriptpubkey(get_scriptpubkey(address))
+
+    send_to_address(address, 250_000)
+    target = mine_blocks(1)
+    await wait_for_electrs(target)
+
+    async with ElectrumClient(f"tcp://{ELECTRS_HOST}:{ELECTRS_PORT}") as client:
+        history = await client.get_history(scripthash)
+        assert len(history) >= 1
+        assert history[0].tx_hash
+        assert history[0].height > 0
+
+        utxos = await client.listunspent(scripthash)
+        assert len(utxos) == 1
+        assert utxos[0].value == 250_000
+
+        raw_tx = await client.get_transaction(utxos[0].tx_hash)
+        assert isinstance(raw_tx, str) and len(raw_tx) > 0
+
+
+@pytest.mark.anyio
+async def test_subscribe_scripthash_payment():
+    address = new_address()
+    scripthash = scripthash_from_scriptpubkey(get_scriptpubkey(address))
+
+    received: list = []
+    event = asyncio.Event()
+
+    def on_change(params: list) -> None:
+        received.append(params)
+        event.set()
+
+    async with ElectrumClient(f"tcp://{ELECTRS_HOST}:{ELECTRS_PORT}") as client:
+        initial_status = await client.subscribe_scripthash(
+            scripthash, callback=on_change
+        )
+        assert initial_status is None  # fresh address has no history
+
+        send_to_address(address, 777_000)
+        target = mine_blocks(1)
+        await wait_for_electrs(target)
+
+        await asyncio.wait_for(event.wait(), timeout=10)
+
+        assert len(received) == 1
+        assert received[0][0] == scripthash  # first param is the scripthash
+        assert received[0][1] is not None  # second param is the new status hash
+
+        balance = await client.get_balance(scripthash)
+        assert balance.confirmed == 777_000
+
+
+@pytest.mark.anyio
+async def test_subscribe_headers():
+    async with ElectrumClient(f"tcp://{ELECTRS_HOST}:{ELECTRS_PORT}") as client:
+        notifications: list = []
+        tip = await client.subscribe_headers(callback=lambda p: notifications.append(p))
+        height_before = tip.height
+
+        target = mine_blocks(1)
+        await wait_for_electrs(target)
+
+        assert await client.get_height() == height_before + 1