diff --git a/test/functional/wallet_balance.py b/test/functional/wallet_balance.py
--- a/test/functional/wallet_balance.py
+++ b/test/functional/wallet_balance.py
@@ -3,21 +3,21 @@
 # Distributed under the MIT software license, see the accompanying
 # file COPYING or http://www.opensource.org/licenses/mit-license.php.
 """Test the wallet balance RPC methods."""
+from decimal import Decimal
+
+from test_framework.address import ADDRESS_BCHREG_UNSPENDABLE as ADDRESS_WATCHONLY
+from test_framework.test_framework import BitcoinTestFramework
 from test_framework.util import (
     assert_equal,
     assert_raises_rpc_error,
 )
-from test_framework.test_framework import BitcoinTestFramework
-from decimal import Decimal
-
-RANDOM_COINBASE_ADDRESS = 'mneYUmWYsuk7kySiURxCi3AGxrAqZxLgPZ'
 
 
 def create_transactions(node, address, amt, fees):
     # Create and sign raw transactions from node to address for amt.
     # Creates a transaction for each fee and returns an array
     # of the raw transactions.
-    utxos = node.listunspent(0)
+    utxos = [u for u in node.listunspent(0) if u['spendable']]
 
     # Create transactions
     inputs = []
@@ -51,16 +51,17 @@
         self.skip_if_no_wallet()
 
     def run_test(self):
+        self.nodes[0].importaddress(ADDRESS_WATCHONLY)
         # Check that nodes don't own any UTXOs
         assert_equal(len(self.nodes[0].listunspent()), 0)
         assert_equal(len(self.nodes[1].listunspent()), 0)
 
-        self.log.info("Mining one block for each node")
+        self.log.info("Mining blocks ...")
 
         self.nodes[0].generate(1)
         self.sync_all()
         self.nodes[1].generate(1)
-        self.nodes[1].generatetoaddress(100, RANDOM_COINBASE_ADDRESS)
+        self.nodes[1].generatetoaddress(101, ADDRESS_WATCHONLY)
         self.sync_all()
 
         assert_equal(self.nodes[0].getbalance(), 50)
@@ -69,8 +70,18 @@
         self.log.info("Test getbalance with different arguments")
         assert_equal(self.nodes[0].getbalance("*"), 50)
         assert_equal(self.nodes[0].getbalance("*", 1), 50)
-        assert_equal(self.nodes[0].getbalance("*", 1, True), 50)
+        assert_equal(self.nodes[0].getbalance("*", 1, True), 100)
         assert_equal(self.nodes[0].getbalance(minconf=1), 50)
+        assert_equal(
+            self.nodes[0].getbalance(
+                minconf=0,
+                include_watchonly=True),
+            100)
+        assert_equal(
+            self.nodes[1].getbalance(
+                minconf=0,
+                include_watchonly=True),
+            50)
 
         # Send 40 BTC from 0 to 1 and 60 BTC from 1 to 0.
         txs = create_transactions(
@@ -130,7 +141,7 @@
                      "unconfirmed_balance"], Decimal('0'))
         assert_equal(self.nodes[1].getunconfirmedbalance(), Decimal('0'))
 
-        self.nodes[1].generatetoaddress(1, RANDOM_COINBASE_ADDRESS)
+        self.nodes[1].generatetoaddress(1, ADDRESS_WATCHONLY)
         self.sync_all()
 
         # balances are correct after the transactions are confirmed
@@ -143,7 +154,7 @@
         txs = create_transactions(self.nodes[1], self.nodes[0].getnewaddress(
         ), Decimal('29.97'), [Decimal('0.01')])
         self.nodes[1].sendrawtransaction(txs[0]['hex'])
-        self.nodes[1].generatetoaddress(2, RANDOM_COINBASE_ADDRESS)
+        self.nodes[1].generatetoaddress(2, ADDRESS_WATCHONLY)
         self.sync_all()
 
         # getbalance with a minconf incorrectly excludes coins that have been spent more recently than the minconf blocks ago