diff --git a/src/bitcoin/mod.rs b/src/bitcoin/mod.rs
index b44cfea1..e767321a 100644
--- a/src/bitcoin/mod.rs
+++ b/src/bitcoin/mod.rs
@@ -269,28 +269,36 @@ impl BitcoinInterface for d::BitcoinD {
 
             // If a conflicting transaction was confirmed instead, replace the txid of the
             // spender for this coin with it and mark it as confirmed.
+            // If a conflicting transaction which doesn't spend this coin was mined or accepted in
+            // our local mempool, mark this spend as expired.
             enum Conflict {
                 // A replacement spending transaction was confirmed.
                 Replaced((bitcoin::Txid, Block)),
-                // A transaction conflicting with the former spending transaction was confirmed,
-                // but it doesn't spend this outpoint anymore.
+                // A transaction conflicting with the former spending transaction was confirmed or
+                // included in our local mempool.
                 Dropped,
             }
             let conflict = res.conflicting_txs.iter().find_map(|txid| {
                 tx_getter.get_transaction(txid).and_then(|tx| {
-                    // FIXME: if a conflict was mined we should somehow wipe the spend_txid of this
-                    // coin.
-                    tx.block.map(|block| {
-                        // Being part of our watchonly wallet isn't enough, as it could be a
-                        // conflicting transaction which spends a different set of coins. Make sure
-                        // it does actually spend this coin.
-                        for txin in tx.tx.input {
-                            if &txin.previous_output == op {
-                                return Conflict::Replaced((*txid, block));
+                    tx.block
+                        .map(|block| {
+                            // Being part of our watchonly wallet isn't enough, as it could be a
+                            // conflicting transaction which spends a different set of coins. Make sure
+                            // it does actually spend this coin.
+                            for txin in tx.tx.input {
+                                if &txin.previous_output == op {
+                                    return Conflict::Replaced((*txid, block));
+                                }
                             }
-                        }
-                        Conflict::Dropped
-                    })
+                            Conflict::Dropped
+                        })
+                        .or_else(|| {
+                            if self.is_in_mempool(txid) {
+                                Some(Conflict::Dropped)
+                            } else {
+                                None
+                            }
+                        })
                 })
             });
             match conflict {
diff --git a/tests/test_chain.py b/tests/test_chain.py
index 493fe75f..42c60788 100644
--- a/tests/test_chain.py
+++ b/tests/test_chain.py
@@ -454,7 +454,7 @@ def test_spend_replacement(lianad, bitcoind):
 
     # Now RBF the first transaction by the second one. The third coin should be
     # newly marked as spending, the second one's spend_txid should be updated and
-    # the first one should not be updated until the second one is mined.
+    # the first one's spend txid should be dropped.
     second_txid = sign_and_broadcast_psbt(lianad, second_psbt)
     wait_for(
         lambda: all(
@@ -462,9 +462,9 @@ def test_spend_replacement(lianad, bitcoind):
             for c in lianad.rpc.listcoins([], second_outpoints)["coins"]
         )
     )
-    assert (
-        lianad.rpc.listcoins([], [first_outpoints[0]])["coins"][0]["spend_info"]["txid"]
-        == first_txid
+    wait_for(
+        lambda: lianad.rpc.listcoins([], [first_outpoints[0]])["coins"][0]["spend_info"]
+        is None
     )
 
     # Now RBF the second transaction with a send-to-self, just because.
@@ -476,11 +476,10 @@ def test_spend_replacement(lianad, bitcoind):
         )
     )
     assert (
-        lianad.rpc.listcoins([], [first_outpoints[0]])["coins"][0]["spend_info"]["txid"]
-        == first_txid
+        lianad.rpc.listcoins([], [first_outpoints[0]])["coins"][0]["spend_info"] is None
     )
 
-    # Once the RBF gets mined, the first coin's spend txid is wiped.
+    # Once the RBF is mined, we detect it as confirmed and the first coin is still unspent.
     bitcoind.generate_block(1, wait_for_mempool=third_txid)
     wait_for(
         lambda: all(
@@ -488,7 +487,6 @@ def test_spend_replacement(lianad, bitcoind):
             for c in lianad.rpc.listcoins([], second_outpoints)["coins"]
         )
     )
-    wait_for(
-        lambda: lianad.rpc.listcoins([], [first_outpoints[0]])["coins"][0]["spend_info"]
-        is None
+    assert (
+        lianad.rpc.listcoins([], [first_outpoints[0]])["coins"][0]["spend_info"] is None
     )