diff --git a/frame/balances/src/lib.rs b/frame/balances/src/lib.rs
index d3085152eba6c..c4a8456c22c67 100644
--- a/frame/balances/src/lib.rs
+++ b/frame/balances/src/lib.rs
@@ -156,6 +156,7 @@
 #[macro_use]
 mod tests;
 mod benchmarking;
+pub mod migration;
 mod tests_composite;
 mod tests_local;
 #[cfg(test)]
@@ -497,6 +498,13 @@ pub mod pallet {
 	#[pallet::whitelist_storage]
 	pub type TotalIssuance<T: Config<I>, I: 'static = ()> = StorageValue<_, T::Balance, ValueQuery>;
 
+	/// The total units of outstanding deactivated balance in the system.
+	#[pallet::storage]
+	#[pallet::getter(fn inactive_issuance)]
+	#[pallet::whitelist_storage]
+	pub type InactiveIssuance<T: Config<I>, I: 'static = ()> =
+		StorageValue<_, T::Balance, ValueQuery>;
+
 	/// The Balances pallet example of storing the balance of an account.
 	///
 	/// # Example
@@ -1067,6 +1075,9 @@ impl<T: Config<I>, I: 'static> fungible::Inspect<T::AccountId> for Pallet<T, I>
 	fn total_issuance() -> Self::Balance {
 		TotalIssuance::<T, I>::get()
 	}
+	fn active_issuance() -> Self::Balance {
+		TotalIssuance::<T, I>::get().saturating_sub(InactiveIssuance::<T, I>::get())
+	}
 	fn minimum_balance() -> Self::Balance {
 		T::ExistentialDeposit::get()
 	}
@@ -1145,6 +1156,14 @@ impl<T: Config<I>, I: 'static> fungible::Transfer<T::AccountId> for Pallet<T, I>
 		let er = if keep_alive { KeepAlive } else { AllowDeath };
 		<Self as Currency<T::AccountId>>::transfer(source, dest, amount, er).map(|_| amount)
 	}
+
+	fn deactivate(amount: Self::Balance) {
+		InactiveIssuance::<T, I>::mutate(|b| b.saturating_accrue(amount));
+	}
+
+	fn reactivate(amount: Self::Balance) {
+		InactiveIssuance::<T, I>::mutate(|b| b.saturating_reduce(amount));
+	}
 }
 
 impl<T: Config<I>, I: 'static> fungible::Unbalanced<T::AccountId> for Pallet<T, I> {
@@ -1418,7 +1437,19 @@ where
 	}
 
 	fn total_issuance() -> Self::Balance {
-		<TotalIssuance<T, I>>::get()
+		TotalIssuance::<T, I>::get()
+	}
+
+	fn active_issuance() -> Self::Balance {
+		<Self as fungible::Inspect<T::AccountId>>::active_issuance()
+	}
+
+	fn deactivate(amount: Self::Balance) {
+		<Self as fungible::Transfer<T::AccountId>>::deactivate(amount);
+	}
+
+	fn reactivate(amount: Self::Balance) {
+		<Self as fungible::Transfer<T::AccountId>>::reactivate(amount);
 	}
 
 	fn minimum_balance() -> Self::Balance {
diff --git a/frame/balances/src/migration.rs b/frame/balances/src/migration.rs
new file mode 100644
index 0000000000000..e27efc217407a
--- /dev/null
+++ b/frame/balances/src/migration.rs
@@ -0,0 +1,51 @@
+// Copyright 2017-2020 Parity Technologies (UK) Ltd.
+// This file is part of Polkadot.
+
+// Polkadot is free software: you can redistribute it and/or modify
+// it under the terms of the GNU General Public License as published by
+// the Free Software Foundation, either version 3 of the License, or
+// (at your option) any later version.
+
+// Polkadot is distributed in the hope that it will be useful,
+// but WITHOUT ANY WARRANTY; without even the implied warranty of
+// MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the
+// GNU General Public License for more details.
+
+// You should have received a copy of the GNU General Public License
+// along with Polkadot.  If not, see <http://www.gnu.org/licenses/>.
+
+use super::*;
+use frame_support::{pallet_prelude::*, traits::OnRuntimeUpgrade, weights::Weight};
+
+// NOTE: This must be used alongside the account whose balance is expected to be inactive.
+// Generally this will be used for the XCM teleport checking account.
+pub struct MigrateToTrackInactive<T: Config, A: Get<T::AccountId>>(
+	sp_std::marker::PhantomData<(T, A)>,
+);
+impl<T: Config, A: Get<T::AccountId>> OnRuntimeUpgrade for MigrateToTrackInactive<T, A> {
+	fn on_runtime_upgrade() -> Weight {
+		let current_version = Pallet::<T>::current_storage_version();
+		let onchain_version = Pallet::<T>::on_chain_storage_version();
+
+		if onchain_version == 0 && current_version == 1 {
+			let b = Pallet::<T>::total_balance(&A::get());
+			Pallet::<T>::deactivate(b);
+			current_version.put::<Pallet<T>>();
+			log::info!(target: "runtime::balances", "Storage to version {:?}", current_version);
+			T::DbWeight::get().reads_writes(3, 3)
+		} else {
+			log::info!(target: "runtime::balances",  "Migration did not execute. This probably should be removed");
+			T::DbWeight::get().reads(2)
+		}
+	}
+
+	#[cfg(feature = "try-runtime")]
+	fn pre_upgrade() -> Result<Vec<u8>, &'static str> {
+		Ok(vec![])
+	}
+
+	#[cfg(feature = "try-runtime")]
+	fn post_upgrade(total: Vec<u8>) -> Result<(), &'static str> {
+		Ok(())
+	}
+}
diff --git a/frame/support/src/traits/tokens/currency.rs b/frame/support/src/traits/tokens/currency.rs
index d0beb66d34923..48247b6021798 100644
--- a/frame/support/src/traits/tokens/currency.rs
+++ b/frame/support/src/traits/tokens/currency.rs
@@ -59,6 +59,18 @@ pub trait Currency<AccountId> {
 	/// The total amount of issuance in the system.
 	fn total_issuance() -> Self::Balance;
 
+	/// The total amount of issuance in the system excluding those which are controlled by the
+	/// system.
+	fn active_issuance() -> Self::Balance {
+		Self::total_issuance()
+	}
+
+	/// Reduce the active issuance by some amount.
+	fn deactivate(_: Self::Balance) {}
+
+	/// Increase the active issuance by some amount, up to the outstanding amount reduced.
+	fn reactivate(_: Self::Balance) {}
+
 	/// The minimum balance any single account may have. This is equivalent to the `Balances`
 	/// module's `ExistentialDeposit`.
 	fn minimum_balance() -> Self::Balance;
@@ -212,6 +224,15 @@ impl<C: Currency<A>, A> Get<C::Balance> for TotalIssuanceOf<C, A> {
 	}
 }
 
+/// A non-const `Get` implementation parameterised by a `Currency` impl which provides the result
+/// of `active_issuance`.
+pub struct ActiveIssuanceOf<C: Currency<A>, A>(sp_std::marker::PhantomData<(C, A)>);
+impl<C: Currency<A>, A> Get<C::Balance> for ActiveIssuanceOf<C, A> {
+	fn get() -> C::Balance {
+		C::active_issuance()
+	}
+}
+
 #[cfg(feature = "std")]
 impl<AccountId> Currency<AccountId> for () {
 	type Balance = u32;
diff --git a/frame/support/src/traits/tokens/fungible.rs b/frame/support/src/traits/tokens/fungible.rs
index 90aadb6d8daa6..7b1ec0f434382 100644
--- a/frame/support/src/traits/tokens/fungible.rs
+++ b/frame/support/src/traits/tokens/fungible.rs
@@ -40,6 +40,12 @@ pub trait Inspect<AccountId> {
 	/// The total amount of issuance in the system.
 	fn total_issuance() -> Self::Balance;
 
+	/// The total amount of issuance in the system excluding those which are controlled by the
+	/// system.
+	fn active_issuance() -> Self::Balance {
+		Self::total_issuance()
+	}
+
 	/// The minimum balance any single account may have.
 	fn minimum_balance() -> Self::Balance;
 
@@ -120,6 +126,12 @@ pub trait Transfer<AccountId>: Inspect<AccountId> {
 		amount: Self::Balance,
 		keep_alive: bool,
 	) -> Result<Self::Balance, DispatchError>;
+
+	/// Reduce the active issuance by some amount.
+	fn deactivate(_: Self::Balance) {}
+
+	/// Increase the active issuance by some amount, up to the outstanding amount reduced.
+	fn reactivate(_: Self::Balance) {}
 }
 
 /// Trait for inspecting a fungible asset which can be reserved.
@@ -213,6 +225,9 @@ impl<
 	fn total_issuance() -> Self::Balance {
 		<F as fungibles::Inspect<AccountId>>::total_issuance(A::get())
 	}
+	fn active_issuance() -> Self::Balance {
+		<F as fungibles::Inspect<AccountId>>::active_issuance(A::get())
+	}
 	fn minimum_balance() -> Self::Balance {
 		<F as fungibles::Inspect<AccountId>>::minimum_balance(A::get())
 	}
@@ -258,6 +273,12 @@ impl<
 	) -> Result<Self::Balance, DispatchError> {
 		<F as fungibles::Transfer<AccountId>>::transfer(A::get(), source, dest, amount, keep_alive)
 	}
+	fn deactivate(amount: Self::Balance) {
+		<F as fungibles::Transfer<AccountId>>::deactivate(A::get(), amount)
+	}
+	fn reactivate(amount: Self::Balance) {
+		<F as fungibles::Transfer<AccountId>>::reactivate(A::get(), amount)
+	}
 }
 
 impl<
diff --git a/frame/support/src/traits/tokens/fungibles.rs b/frame/support/src/traits/tokens/fungibles.rs
index 8c370e9a0d8b5..0743e3031c467 100644
--- a/frame/support/src/traits/tokens/fungibles.rs
+++ b/frame/support/src/traits/tokens/fungibles.rs
@@ -46,6 +46,12 @@ pub trait Inspect<AccountId> {
 	/// The total amount of issuance in the system.
 	fn total_issuance(asset: Self::AssetId) -> Self::Balance;
 
+	/// The total amount of issuance in the system excluding those which are controlled by the
+	/// system.
+	fn active_issuance(asset: Self::AssetId) -> Self::Balance {
+		Self::total_issuance(asset)
+	}
+
 	/// The minimum balance any single account may have.
 	fn minimum_balance(asset: Self::AssetId) -> Self::Balance;
 
@@ -177,6 +183,12 @@ pub trait Transfer<AccountId>: Inspect<AccountId> {
 		amount: Self::Balance,
 		keep_alive: bool,
 	) -> Result<Self::Balance, DispatchError>;
+
+	/// Reduce the active issuance by some amount.
+	fn deactivate(_: Self::AssetId, _: Self::Balance) {}
+
+	/// Increase the active issuance by some amount, up to the outstanding amount reduced.
+	fn reactivate(_: Self::AssetId, _: Self::Balance) {}
 }
 
 /// Trait for inspecting a set of named fungible assets which can be placed on hold.
diff --git a/frame/treasury/src/lib.rs b/frame/treasury/src/lib.rs
index 21b4d2b769c8b..4aa00c348585c 100644
--- a/frame/treasury/src/lib.rs
+++ b/frame/treasury/src/lib.rs
@@ -223,6 +223,10 @@ pub mod pallet {
 		OptionQuery,
 	>;
 
+	/// The amount which has been reported as inactive to Currency.
+	#[pallet::storage]
+	pub type Inactive<T: Config<I>, I: 'static = ()> = StorageValue<_, BalanceOf<T, I>, ValueQuery>;
+
 	/// Proposal indices that have been approved but not yet awarded.
 	#[pallet::storage]
 	#[pallet::getter(fn approvals)]
@@ -316,6 +320,16 @@ pub mod pallet {
 		/// - The weight is overestimated if some approvals got missed.
 		/// # </weight>
 		fn on_initialize(n: T::BlockNumber) -> Weight {
+			let pot = Self::pot();
+			let deactivated = Inactive::<T, I>::get();
+			if pot != deactivated {
+				match (pot > deactivated, pot.max(deactivated) - pot.min(deactivated)) {
+					(true, delta) => T::Currency::deactivate(delta),
+					(false, delta) => T::Currency::reactivate(delta),
+				}
+				Inactive::<T, I>::put(&pot);
+			}
+
 			// Check to see if we should spend some funds!
 			if (n % T::SpendPeriod::get()).is_zero() {
 				Self::spend_funds()