diff --git a/examples/basecoin/app/app_test.go b/examples/basecoin/app/app_test.go
index 15b98bd4c..8687d47dc 100644
--- a/examples/basecoin/app/app_test.go
+++ b/examples/basecoin/app/app_test.go
@@ -57,11 +57,16 @@ func TestSendMsg(t *testing.T) {
 		PubKey:   pk,
 		Sequence: 0,
 	}
-	accs := []types.AppAccount{
-		{baseAcc, "foobart"},
-		{baseAcc, "endofzeworld"},
+	accs := []*GenesisAccount{
+		NewGenesisAccount(types.AppAccount{baseAcc, "foobart"}),
+		NewGenesisAccount(types.AppAccount{baseAcc, "endofzeworld"}),
 	}
 	bytes, err := json.MarshalIndent(&accs, "", "\t")
-	_ = bytes
-	// XXX test the json bytes in the InitStater
+
+	app := tba.BasecoinApp
+	ctxCheckTx := app.BaseApp.NewContext(true, nil)
+	ctxDeliverTx := app.BaseApp.NewContext(false, nil)
+	err = app.BaseApp.InitStater(ctxCheckTx, ctxDeliverTx, bytes)
+	require.Nil(t, err)
+
 }
diff --git a/examples/basecoin/app/init_baseapp.go b/examples/basecoin/app/init_baseapp.go
index f0528f98c..14402ef4a 100644
--- a/examples/basecoin/app/init_baseapp.go
+++ b/examples/basecoin/app/init_baseapp.go
@@ -6,6 +6,9 @@ import (
 	"github.com/cosmos/cosmos-sdk/baseapp"
 	"github.com/cosmos/cosmos-sdk/examples/basecoin/types"
 	sdk "github.com/cosmos/cosmos-sdk/types"
+	"github.com/cosmos/cosmos-sdk/x/auth"
+	crypto "github.com/tendermint/go-crypto"
+	cmn "github.com/tendermint/tmlibs/common"
 )
 
 // initCapKeys, initBaseApp, initStores, initHandlers.
@@ -31,6 +34,44 @@ func (app *BasecoinApp) initBaseAppTxDecoder() {
 	})
 }
 
+// We use GenesisAccount instead of types.AppAccount for cleaner json input of PubKey
+type GenesisAccount struct {
+	Name     string         `json:"name"`
+	Address  crypto.Address `json:"address"`
+	Coins    sdk.Coins      `json:"coins"`
+	PubKey   cmn.HexBytes   `json:"public_key"`
+	Sequence int64          `json:"sequence"`
+}
+
+func NewGenesisAccount(aa types.AppAccount) *GenesisAccount {
+	return &GenesisAccount{
+		Name:     aa.Name,
+		Address:  aa.Address,
+		Coins:    aa.Coins,
+		PubKey:   aa.PubKey.Bytes(),
+		Sequence: aa.Sequence,
+	}
+}
+
+// convert GenesisAccount to AppAccount
+func (ga *GenesisAccount) toAppAccount() (acc types.AppAccount, err error) {
+
+	pk, err := crypto.PubKeyFromBytes(ga.PubKey)
+	if err != nil {
+		return
+	}
+	baseAcc := auth.BaseAccount{
+		Address:  ga.Address,
+		Coins:    ga.Coins,
+		PubKey:   pk,
+		Sequence: ga.Sequence,
+	}
+	return types.AppAccount{
+		BaseAccount: baseAcc,
+		Name:        "foobart",
+	}, nil
+}
+
 // define the custom logic for basecoin initialization
 func (app *BasecoinApp) initBaseAppInitStater() {
 	accountMapper := app.accountMapper
@@ -40,16 +81,22 @@ func (app *BasecoinApp) initBaseAppInitStater() {
 			return nil
 		}
 
-		var accs []*types.AppAccount
+		var gaccs []*GenesisAccount
 
-		err := json.Unmarshal(state, &accs)
+		err := json.Unmarshal(state, &gaccs)
 		if err != nil {
 			return sdk.ErrGenesisParse("").TraceCause(err, "")
 		}
 
-		for _, acc := range accs {
-			accountMapper.SetAccount(ctxCheckTx, acc)
-			accountMapper.SetAccount(ctxDeliverTx, acc)
+		for _, gacc := range gaccs {
+			acc, err := gacc.toAppAccount()
+			if err != nil {
+				return sdk.ErrGenesisParse("").TraceCause(err, "")
+			}
+
+			//panic(fmt.Sprintf("debug acc: %s\n", acc))
+			accountMapper.SetAccount(ctxCheckTx, &acc.BaseAccount)
+			accountMapper.SetAccount(ctxDeliverTx, &acc.BaseAccount)
 		}
 		return nil
 	})