diff --git a/CHANGELOG.md b/CHANGELOG.md
index d24d5d04bf51..4fdd78122573 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -40,6 +40,7 @@ Ref: https://keepachangelog.com/en/1.0.0/
 
 ### Breaking Changes
 
+* (x/staking) [#25724](https://github.com/cosmos/cosmos-sdk/issues/25724) Validate `BondDenom` in `MsgUpdateParams` to prevent setting non-existent or zero-supply denoms.
 * [#25778](https://github.com/cosmos/cosmos-sdk/pull/25778) Update `log` to log v2.
 * [#25090](https://github.com/cosmos/cosmos-sdk/pull/25090) Moved deprecated modules to `./contrib`.  These modules are still available but will no longer be actively maintained or supported in the Cosmos SDK Bug Bounty program.
     * `x/group`
diff --git a/x/staking/keeper/msg_server.go b/x/staking/keeper/msg_server.go
index 6e3afe01d622..33a4f26c982f 100644
--- a/x/staking/keeper/msg_server.go
+++ b/x/staking/keeper/msg_server.go
@@ -594,6 +594,14 @@ func (k msgServer) UpdateParams(ctx context.Context, msg *types.MsgUpdateParams)
 		return nil, err
 	}
 
+	// Validate that the bond denom exists on-chain by checking if it has supply.
+	// This prevents governance from setting bond_denom to a non-existent denom,
+	// which would place the chain in an unsafe state.
+	supply := k.bankKeeper.GetSupply(ctx, msg.Params.BondDenom)
+	if supply.IsZero() {
+		return nil, errorsmod.Wrapf(sdkerrors.ErrInvalidRequest, "bond denom %s does not exist or has zero supply", msg.Params.BondDenom)
+	}
+
 	// store params
 	if err := k.SetParams(ctx, msg.Params); err != nil {
 		return nil, err
diff --git a/x/staking/keeper/msg_server_test.go b/x/staking/keeper/msg_server_test.go
index bd44fa311707..8fb824f0d7bf 100644
--- a/x/staking/keeper/msg_server_test.go
+++ b/x/staking/keeper/msg_server_test.go
@@ -995,6 +995,7 @@ func (s *KeeperTestSuite) TestMsgUpdateParams() {
 		input     *stakingtypes.MsgUpdateParams
 		expErr    bool
 		expErrMsg string
+		setup     func()
 	}{
 		{
 			name: "valid params",
@@ -1003,6 +1004,9 @@ func (s *KeeperTestSuite) TestMsgUpdateParams() {
 				Params:    stakingtypes.DefaultParams(),
 			},
 			expErr: false,
+			setup: func() {
+				s.bankKeeper.EXPECT().GetSupply(gomock.Any(), stakingtypes.DefaultParams().BondDenom).Return(sdk.NewInt64Coin(stakingtypes.DefaultParams().BondDenom, 1000000))
+			},
 		},
 		{
 			name: "invalid authority",
@@ -1061,6 +1065,25 @@ func (s *KeeperTestSuite) TestMsgUpdateParams() {
 			expErr:    true,
 			expErrMsg: "bond denom cannot be blank",
 		},
+		{
+			name: "invalid bond denom - zero supply",
+			input: &stakingtypes.MsgUpdateParams{
+				Authority: keeper.GetAuthority(),
+				Params: stakingtypes.Params{
+					MinCommissionRate: stakingtypes.DefaultMinCommissionRate,
+					UnbondingTime:     stakingtypes.DefaultUnbondingTime,
+					MaxValidators:     stakingtypes.DefaultMaxValidators,
+					MaxEntries:        stakingtypes.DefaultMaxEntries,
+					HistoricalEntries: stakingtypes.DefaultHistoricalEntries,
+					BondDenom:         "ghosttoken",
+				},
+			},
+			expErr:    true,
+			expErrMsg: "does not exist or has zero supply",
+			setup: func() {
+				s.bankKeeper.EXPECT().GetSupply(gomock.Any(), "ghosttoken").Return(sdk.NewInt64Coin("ghosttoken", 0))
+			},
+		},
 		{
 			name: "max validators must be positive",
 			input: &stakingtypes.MsgUpdateParams{
@@ -1113,6 +1136,11 @@ func (s *KeeperTestSuite) TestMsgUpdateParams() {
 
 	for _, tc := range testCases {
 		s.T().Run(tc.name, func(t *testing.T) {
+			// Setup mocks if specified
+			if tc.setup != nil {
+				tc.setup()
+			}
+
 			_, err := msgServer.UpdateParams(ctx, tc.input)
 			if tc.expErr {
 				require.Error(err)