diff --git a/CHANGELOG.md b/CHANGELOG.md
index 8eddb0c40a6c..443bdfa9f0c1 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -55,6 +55,7 @@ Ref: https://keepachangelog.com/en/1.0.0/
 
 ### Bug Fixes
 
+* (types) [#13265](https://github.com/cosmos/cosmos-sdk/pull/13265) Correctly coalesce coins even with repeated denominations & simplify logic
 * (x/auth) [#13200](https://github.com/cosmos/cosmos-sdk/pull/13200) Fix wrong sequences in `sign-batch`.
 * (export) [#13029](https://github.com/cosmos/cosmos-sdk/pull/13029) Fix exporting the blockParams regression.
 * [#13046](https://github.com/cosmos/cosmos-sdk/pull/13046) Fix missing return statement in BaseApp.Query.
diff --git a/types/coin.go b/types/coin.go
index acf3ba13b27d..12b373c59230 100644
--- a/types/coin.go
+++ b/types/coin.go
@@ -310,7 +310,7 @@ func (coins Coins) Add(coinsB ...Coin) Coins {
 // denomination and addition only occurs when the denominations match, otherwise
 // the coin is simply added to the sum assuming it's not zero.
 // The function panics if `coins` or  `coinsB` are not sorted (ascending).
-func (coins Coins) safeAdd(coinsB Coins) Coins {
+func (coins Coins) safeAdd(coinsB Coins) (coalesced Coins) {
 	// probably the best way will be to make Coins and interface and hide the structure
 	// definition (type alias)
 	if !coins.isSorted() {
@@ -320,51 +320,24 @@ func (coins Coins) safeAdd(coinsB Coins) Coins {
 		panic("Wrong argument: coins must be sorted")
 	}
 
-	sum := ([]Coin)(nil)
-	indexA, indexB := 0, 0
-	lenA, lenB := len(coins), len(coinsB)
-
-	for {
-		if indexA == lenA {
-			if indexB == lenB {
-				// return nil coins if both sets are empty
-				return sum
-			}
-
-			// return set B (excluding zero coins) if set A is empty
-			return append(sum, removeZeroCoins(coinsB[indexB:])...)
-		} else if indexB == lenB {
-			// return set A (excluding zero coins) if set B is empty
-			return append(sum, removeZeroCoins(coins[indexA:])...)
+	uniqCoins := make(map[string]Coins, len(coins)+len(coinsB))
+	// Traverse all the coins for each of the coins and coinsB.
+	for _, cL := range []Coins{coins, coinsB} {
+		for _, c := range cL {
+			uniqCoins[c.Denom] = append(uniqCoins[c.Denom], c)
 		}
+	}
 
-		coinA, coinB := coins[indexA], coinsB[indexB]
-
-		switch strings.Compare(coinA.Denom, coinB.Denom) {
-		case -1: // coin A denom < coin B denom
-			if !coinA.IsZero() {
-				sum = append(sum, coinA)
-			}
-
-			indexA++
-
-		case 0: // coin A denom == coin B denom
-			res := coinA.Add(coinB)
-			if !res.IsZero() {
-				sum = append(sum, res)
-			}
-
-			indexA++
-			indexB++
-
-		case 1: // coin A denom > coin B denom
-			if !coinB.IsZero() {
-				sum = append(sum, coinB)
-			}
-
-			indexB++
+	for denom, cL := range uniqCoins {
+		comboCoin := Coin{Denom: denom, Amount: NewInt(0)}
+		for _, c := range cL {
+			comboCoin = comboCoin.Add(c)
+		}
+		if !comboCoin.IsZero() {
+			coalesced = append(coalesced, comboCoin)
 		}
 	}
+	return coalesced.Sort()
 }
 
 // DenomsSubsetOf returns true if receiver's denom set
diff --git a/types/coin_test.go b/types/coin_test.go
index 8f2e6c92d023..5010bce23996 100644
--- a/types/coin_test.go
+++ b/types/coin_test.go
@@ -5,6 +5,7 @@ import (
 	"strings"
 	"testing"
 
+	"github.com/stretchr/testify/require"
 	"github.com/stretchr/testify/suite"
 
 	"github.com/cosmos/cosmos-sdk/codec"
@@ -508,21 +509,50 @@ func (s *coinTestSuite) TestEqualCoins() {
 
 func (s *coinTestSuite) TestAddCoins() {
 	cases := []struct {
+		name     string
 		inputOne sdk.Coins
 		inputTwo sdk.Coins
 		expected sdk.Coins
 	}{
-		{sdk.Coins{s.ca1, s.cm1}, sdk.Coins{s.ca1, s.cm1}, sdk.Coins{s.ca2, s.cm2}},
-		{sdk.Coins{s.ca0, s.cm1}, sdk.Coins{s.ca0, s.cm0}, sdk.Coins{s.cm1}},
-		{sdk.Coins{s.ca2}, sdk.Coins{s.cm0}, sdk.Coins{s.ca2}},
-		{sdk.Coins{s.ca1}, sdk.Coins{s.ca1, s.cm2}, sdk.Coins{s.ca2, s.cm2}},
-		{sdk.Coins{s.ca0, s.cm0}, sdk.Coins{s.ca0, s.cm0}, sdk.Coins(nil)},
+		{"{1atom,1muon}+{1atom,1muon}", sdk.Coins{s.ca1, s.cm1}, sdk.Coins{s.ca1, s.cm1}, sdk.Coins{s.ca2, s.cm2}},
+		{"{0atom,1muon}+{0atom,0muon}", sdk.Coins{s.ca0, s.cm1}, sdk.Coins{s.ca0, s.cm0}, sdk.Coins{s.cm1}},
+		{"{2atom}+{0muon}", sdk.Coins{s.ca2}, sdk.Coins{s.cm0}, sdk.Coins{s.ca2}},
+		{"{1atom}+{1atom,2muon}", sdk.Coins{s.ca1}, sdk.Coins{s.ca1, s.cm2}, sdk.Coins{s.ca2, s.cm2}},
+		{"{0atom,0muon}+{0atom,0muon}", sdk.Coins{s.ca0, s.cm0}, sdk.Coins{s.ca0, s.cm0}, sdk.Coins(nil)},
 	}
 
-	for tcIndex, tc := range cases {
-		res := tc.inputOne.Add(tc.inputTwo...)
-		s.Require().True(res.IsValid())
-		s.Require().Equal(tc.expected, res, "sum of coins is incorrect, tc #%d", tcIndex)
+	for _, tc := range cases {
+		s.T().Run(tc.name, func(t *testing.T) {
+			res := tc.inputOne.Add(tc.inputTwo...)
+			require.True(t, res.IsValid(), fmt.Sprintf("%s + %s = %s", tc.inputOne, tc.inputTwo, res))
+			require.Equal(t, tc.expected, res, "sum of coins is incorrect")
+		})
+	}
+}
+
+// Tests that even if coins with repeated denominations are passed into .Add that they
+// are correctly coalesced. Please see issue https://github.com/cosmos/cosmos-sdk/issues/13234
+func TestCoinsAddCoalescesDuplicateDenominations(t *testing.T) {
+	A := sdk.Coins{
+		{"den", sdk.NewInt(2)},
+		{"den", sdk.NewInt(3)},
+	}
+	B := sdk.Coins{
+		{"den", sdk.NewInt(3)},
+		{"den", sdk.NewInt(2)},
+		{"den", sdk.NewInt(1)},
+	}
+
+	A = A.Sort()
+	B = B.Sort()
+	got := A.Add(B...)
+
+	want := sdk.Coins{
+		{"den", sdk.NewInt(11)},
+	}
+
+	if !got.IsEqual(want) {
+		t.Fatalf("Wrong result\n\tGot:   %s\n\tWant: %s", got, want)
 	}
 }