diff --git a/src/wallet/wallet.cpp b/src/wallet/wallet.cpp
index 4a4aa837eaa..75d34e7215e 100644
--- a/src/wallet/wallet.cpp
+++ b/src/wallet/wallet.cpp
@@ -2904,7 +2904,9 @@ std::shared_ptr<CWallet> CWallet::Create(WalletContext& context, const std::stri
         // ensure this wallet.dat can only be opened by clients supporting HD with chain split and expects no default key
         walletInstance->SetMinVersion(FEATURE_LATEST);
 
-        walletInstance->InitWalletFlags(wallet_creation_flags);
+        // Init with passed flags.
+        // Always set the cache upgrade flag as this feature is supported from the beginning.
+        walletInstance->InitWalletFlags(wallet_creation_flags | WALLET_FLAG_LAST_HARDENED_XPUB_CACHED);
 
         // Only descriptor wallets can be created
         assert(walletInstance->IsWalletFlagSet(WALLET_FLAG_DESCRIPTORS));