diff --git a/Cargo.lock b/Cargo.lock
index 1cf7244ab..899d3b64f 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -6725,6 +6725,7 @@ dependencies = [
  "clap",
  "env_logger 0.11.3",
  "hex",
+ "hex-literal",
  "jsonrpsee",
  "partner-chains-cardano-offchain",
  "serde",
diff --git a/toolkit/cli/smart-contracts-commands/Cargo.toml b/toolkit/cli/smart-contracts-commands/Cargo.toml
index 314e1b439..ad7054e44 100644
--- a/toolkit/cli/smart-contracts-commands/Cargo.toml
+++ b/toolkit/cli/smart-contracts-commands/Cargo.toml
@@ -15,3 +15,6 @@ tokio = { workspace = true }
 serde = { workspace = true }
 serde_json = { workspace = true }
 cardano-serialization-lib = { workspace = true }
+
+[dev-dependencies]
+hex-literal = { workspace = true }
diff --git a/toolkit/cli/smart-contracts-commands/src/lib.rs b/toolkit/cli/smart-contracts-commands/src/lib.rs
index 0cd28074b..94d25d745 100644
--- a/toolkit/cli/smart-contracts-commands/src/lib.rs
+++ b/toolkit/cli/smart-contracts-commands/src/lib.rs
@@ -62,6 +62,7 @@ pub(crate) fn read_private_key_from_file(path: &str) -> CmdResult<MainchainPriva
 pub(crate) fn parse_partnerchain_public_keys(
 	partner_chain_public_keys: &str,
 ) -> CmdResult<PermissionedCandidateData> {
+	let partner_chain_public_keys = partner_chain_public_keys.replace("0x", "");
 	if let [sidechain_pub_key, aura_pub_key, grandpa_pub_key] =
 		partner_chain_public_keys.split(":").collect::<Vec<_>>()[..]
 	{
@@ -86,3 +87,38 @@ fn payment_signing_key_to_mainchain_address_hash(
 		.try_into()
 		.map(MainchainAddressHash)?)
 }
+
+#[cfg(test)]
+mod test {
+	use crate::parse_partnerchain_public_keys;
+	use hex_literal::hex;
+	use sidechain_domain::{
+		AuraPublicKey, GrandpaPublicKey, PermissionedCandidateData, SidechainPublicKey,
+	};
+
+	#[test]
+	fn parse_partnerchain_public_keys_with_0x_prefix() {
+		let input = "039799ff93d184146deacaa455dade51b13ed16f23cdad11d1ad6af20103391180:e85534c93315d60f808568d1dce5cb9e8ba6ed0b204209c5cc8f3bec56c10b73:cdf3e5b33f53c8b541bbaea383225c45654f24de38c585725f3cff25b2802f55";
+		assert_eq!(parse_partnerchain_public_keys(input).unwrap(), expected_public_keys())
+	}
+
+	#[test]
+	fn parse_partnerchain_public_keys_without_0x_prefix() {
+		let input = "0x039799ff93d184146deacaa455dade51b13ed16f23cdad11d1ad6af20103391180:0xe85534c93315d60f808568d1dce5cb9e8ba6ed0b204209c5cc8f3bec56c10b73:0xcdf3e5b33f53c8b541bbaea383225c45654f24de38c585725f3cff25b2802f55";
+		assert_eq!(parse_partnerchain_public_keys(input).unwrap(), expected_public_keys())
+	}
+
+	fn expected_public_keys() -> PermissionedCandidateData {
+		PermissionedCandidateData {
+			sidechain_public_key: SidechainPublicKey(
+				hex!("039799ff93d184146deacaa455dade51b13ed16f23cdad11d1ad6af20103391180").to_vec(),
+			),
+			aura_public_key: AuraPublicKey(
+				hex!("e85534c93315d60f808568d1dce5cb9e8ba6ed0b204209c5cc8f3bec56c10b73").to_vec(),
+			),
+			grandpa_public_key: GrandpaPublicKey(
+				hex!("cdf3e5b33f53c8b541bbaea383225c45654f24de38c585725f3cff25b2802f55").to_vec(),
+			),
+		}
+	}
+}