diff --git a/src/wallet/rpcwallet.cpp b/src/wallet/rpcwallet.cpp
index b7618e1259b..a600331ba08 100644
--- a/src/wallet/rpcwallet.cpp
+++ b/src/wallet/rpcwallet.cpp
@@ -2684,8 +2684,8 @@ static UniValue createwallet(const JSONRPCRequest& request)
 
     std::string error;
     std::string warning;
-    WalletCreationStatus status;
-    std::shared_ptr<CWallet> wallet = CreateWallet(*g_rpc_interfaces->chain, passphrase, flags, request.params[0].get_str(), error, warning, status);
+    std::shared_ptr<CWallet> wallet;
+    WalletCreationStatus status = CreateWallet(*g_rpc_interfaces->chain, passphrase, flags, request.params[0].get_str(), error, warning, wallet);
     if (status == WalletCreationStatus::CREATION_FAILED) {
         throw JSONRPCError(RPC_WALLET_ERROR, error);
     } else if (status == WalletCreationStatus::ENCRYPTION_FAILED) {
diff --git a/src/wallet/wallet.cpp b/src/wallet/wallet.cpp
index a4e3a234764..804c5c619d3 100644
--- a/src/wallet/wallet.cpp
+++ b/src/wallet/wallet.cpp
@@ -160,7 +160,7 @@ std::shared_ptr<CWallet> LoadWallet(interfaces::Chain& chain, const std::string&
     return LoadWallet(chain, WalletLocation(name), error, warning);
 }
 
-std::shared_ptr<CWallet> CreateWallet(interfaces::Chain& chain, const SecureString& passphrase, uint64_t wallet_creation_flags, const std::string& name, std::string& error, std::string& warning, WalletCreationStatus& status)
+WalletCreationStatus CreateWallet(interfaces::Chain& chain, const SecureString& passphrase, uint64_t wallet_creation_flags, const std::string& name, std::string& error, std::string& warning, std::shared_ptr<CWallet>& result)
 {
     // Indicate that the wallet is actually supposed to be blank and not just blank to make it encrypted
     bool create_blank = (wallet_creation_flags & WALLET_FLAG_BLANK_WALLET);
@@ -174,39 +174,40 @@ std::shared_ptr<CWallet> CreateWallet(interfaces::Chain& chain, const SecureStri
     WalletLocation location(name);
     if (location.Exists()) {
         error = "Wallet " + location.GetName() + " already exists.";
-        status = WalletCreationStatus::CREATION_FAILED;
-        return nullptr;
+        return WalletCreationStatus::CREATION_FAILED;
     }
 
     // Wallet::Verify will check if we're trying to create a wallet with a duplicate name.
     std::string wallet_error;
     if (!CWallet::Verify(chain, location, false, wallet_error, warning)) {
         error = "Wallet file verification failed: " + wallet_error;
-        status = WalletCreationStatus::CREATION_FAILED;
-        return nullptr;
+        return WalletCreationStatus::CREATION_FAILED;
+    }
+
+    // Do not allow a passphrase when private keys are disabled
+    if (!passphrase.empty() && (wallet_creation_flags & WALLET_FLAG_DISABLE_PRIVATE_KEYS)) {
+        error = "Passphrase provided but private keys are disabled. A passphrase is only used to encrypt private keys, so cannot be used for wallets with private keys disabled.";
+        return WalletCreationStatus::CREATION_FAILED;
     }
 
     // Make the wallet
     std::shared_ptr<CWallet> wallet = CWallet::CreateWalletFromFile(chain, location, wallet_creation_flags);
     if (!wallet) {
         error = "Wallet creation failed";
-        status = WalletCreationStatus::CREATION_FAILED;
-        return nullptr;
+        return WalletCreationStatus::CREATION_FAILED;
     }
 
     // Encrypt the wallet
     if (!passphrase.empty() && !(wallet_creation_flags & WALLET_FLAG_DISABLE_PRIVATE_KEYS)) {
         if (!wallet->EncryptWallet(passphrase)) {
             error = "Error: Wallet created but failed to encrypt.";
-            status = WalletCreationStatus::ENCRYPTION_FAILED;
-            return nullptr;
+            return WalletCreationStatus::ENCRYPTION_FAILED;
         }
         if (!create_blank) {
             // Unlock the wallet
             if (!wallet->Unlock(passphrase)) {
                 error = "Error: Wallet was encrypted but could not be unlocked";
-                status = WalletCreationStatus::ENCRYPTION_FAILED;
-                return nullptr;
+                return WalletCreationStatus::ENCRYPTION_FAILED;
             }
 
             // Set a seed for the wallet
@@ -220,8 +221,8 @@ std::shared_ptr<CWallet> CreateWallet(interfaces::Chain& chain, const SecureStri
     }
     AddWallet(wallet);
     wallet->postInitProcess();
-    status = WalletCreationStatus::SUCCESS;
-    return wallet;
+    result = wallet;
+    return WalletCreationStatus::SUCCESS;
 }
 
 const uint32_t BIP32_HARDENED_KEY_LIMIT = 0x80000000;
diff --git a/src/wallet/wallet.h b/src/wallet/wallet.h
index 059528106f2..e36703f2c1a 100644
--- a/src/wallet/wallet.h
+++ b/src/wallet/wallet.h
@@ -55,7 +55,7 @@ enum class WalletCreationStatus {
     ENCRYPTION_FAILED
 };
 
-std::shared_ptr<CWallet> CreateWallet(interfaces::Chain& chain, const SecureString& passphrase, uint64_t wallet_creation_flags, const std::string& name, std::string& error, std::string& warning, WalletCreationStatus& status);
+WalletCreationStatus CreateWallet(interfaces::Chain& chain, const SecureString& passphrase, uint64_t wallet_creation_flags, const std::string& name, std::string& error, std::string& warning, std::shared_ptr<CWallet>& result);
 
 //! Default for -keypool
 static const unsigned int DEFAULT_KEYPOOL_SIZE = 1000;
diff --git a/test/functional/wallet_createwallet.py b/test/functional/wallet_createwallet.py
index c17949a2f62..294f90a0faa 100755
--- a/test/functional/wallet_createwallet.py
+++ b/test/functional/wallet_createwallet.py
@@ -119,5 +119,8 @@ class CreateWalletTest(BitcoinTestFramework):
         # Empty passphrase, error
         assert_raises_rpc_error(-16, 'Cannot encrypt a wallet with a blank password', self.nodes[0].createwallet, 'w7', False, False, '')
 
+        self.log.info('Using a passphrase with private keys disabled returns error')
+        assert_raises_rpc_error(-4, 'Passphrase provided but private keys are disabled. A passphrase is only used to encrypt private keys, so cannot be used for wallets with private keys disabled.', self.nodes[0].createwallet, wallet_name='w8', disable_private_keys=True, passphrase='thisisapassphrase')
+
 if __name__ == '__main__':
     CreateWalletTest().main()