diff --git a/CHANGELOG.md b/CHANGELOG.md
index 0646b290c5..d38016452c 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -9,6 +9,7 @@ and this project adheres to [Semantic Versioning](http://semver.org/).
 
 ### Added
 
+- [#705](https://github.com/FuelLabs/fuel-vm/pull/705): Added `privileged_address` to the `ConsensusParameters` for permissioned operations(like upgrade of the network).
 - [#648](https://github.com/FuelLabs/fuel-vm/pull/648): Added support for generating proofs for Sparse Merkle Trees (SMTs) and proof verification. Proofs can be used to attest to the inclusion or exclusion of data from the set.
 
 ### Changed
diff --git a/fuel-tx/src/tests/valid_cases.rs b/fuel-tx/src/tests/valid_cases.rs
index 20dc9f6e06..cf3e1e79ce 100644
--- a/fuel-tx/src/tests/valid_cases.rs
+++ b/fuel-tx/src/tests/valid_cases.rs
@@ -39,6 +39,7 @@ pub fn test_params() -> ConsensusParameters {
         Default::default(),
         Default::default(),
         Default::default(),
+        Default::default(),
     )
 }
 
diff --git a/fuel-tx/src/transaction/consensus_parameters.rs b/fuel-tx/src/transaction/consensus_parameters.rs
index 227718a1e4..0db04fd833 100644
--- a/fuel-tx/src/transaction/consensus_parameters.rs
+++ b/fuel-tx/src/transaction/consensus_parameters.rs
@@ -1,5 +1,6 @@
 use fuel_types::{
     bytes::WORD_SIZE,
+    Address,
     AssetId,
     Bytes32,
     ChainId,
@@ -53,6 +54,7 @@ impl ConsensusParameters {
         gas_costs: GasCosts,
         base_asset_id: AssetId,
         block_gas_limit: u64,
+        privileged_address: Address,
     ) -> Self {
         Self::V1(ConsensusParametersV1 {
             tx_params,
@@ -64,6 +66,7 @@ impl ConsensusParameters {
             gas_costs,
             base_asset_id,
             block_gas_limit,
+            privileged_address,
         })
     }
 
@@ -129,6 +132,13 @@ impl ConsensusParameters {
             Self::V1(params) => params.block_gas_limit,
         }
     }
+
+    /// Get the privileged address
+    pub const fn privileged_address(&self) -> &Address {
+        match self {
+            Self::V1(params) => &params.privileged_address,
+        }
+    }
 }
 
 #[cfg(feature = "builder")]
@@ -195,6 +205,13 @@ impl ConsensusParameters {
             Self::V1(params) => params.block_gas_limit = block_gas_limit,
         }
     }
+
+    /// Set the privileged address.
+    pub fn set_privileged_address(&mut self, privileged_address: Address) {
+        match self {
+            Self::V1(params) => params.privileged_address = privileged_address,
+        }
+    }
 }
 
 /// A collection of parameters for convenience
@@ -211,22 +228,15 @@ pub struct ConsensusParametersV1 {
     pub gas_costs: GasCosts,
     pub base_asset_id: AssetId,
     pub block_gas_limit: u64,
+    /// The privileged address(user or predicate) that can perform permissioned
+    /// operations(like upgrading the network).
+    pub privileged_address: Address,
 }
 
 impl ConsensusParametersV1 {
     /// Constructor for the `ConsensusParameters` with Standard values.
     pub fn standard() -> Self {
-        Self {
-            tx_params: TxParameters::DEFAULT,
-            predicate_params: PredicateParameters::DEFAULT,
-            script_params: ScriptParameters::DEFAULT,
-            contract_params: ContractParameters::DEFAULT,
-            fee_params: FeeParameters::DEFAULT,
-            chain_id: ChainId::default(),
-            gas_costs: GasCosts::default(),
-            base_asset_id: Default::default(),
-            block_gas_limit: TxParameters::DEFAULT.max_gas_per_tx,
-        }
+        Self::standard_with_id(ChainId::default())
     }
 
     /// Constructor for the `ConsensusParameters` with Standard values around `ChainId`.
@@ -241,6 +251,7 @@ impl ConsensusParametersV1 {
             gas_costs: GasCosts::default(),
             base_asset_id: Default::default(),
             block_gas_limit: TxParameters::DEFAULT.max_gas_per_tx,
+            privileged_address: Default::default(),
         }
     }
 }
diff --git a/fuel-vm/src/checked_transaction.rs b/fuel-vm/src/checked_transaction.rs
index b285c7499d..3a2b0eb015 100644
--- a/fuel-vm/src/checked_transaction.rs
+++ b/fuel-vm/src/checked_transaction.rs
@@ -766,6 +766,7 @@ mod tests {
             Default::default(),
             Default::default(),
             Default::default(),
+            Default::default(),
         )
     }
 
diff --git a/fuel-vm/src/tests/outputs.rs b/fuel-vm/src/tests/outputs.rs
index 2676ada155..6f6da24540 100644
--- a/fuel-vm/src/tests/outputs.rs
+++ b/fuel-vm/src/tests/outputs.rs
@@ -169,6 +169,7 @@ fn correct_change_is_provided_for_coin_outputs_create() {
         context.get_gas_costs().to_owned(),
         *context.get_base_asset_id(),
         context.get_block_gas_limit(),
+        *context.get_privileged_address(),
     );
     let create = create
         .into_checked_basic(context.get_block_height(), &consensus_params)
diff --git a/fuel-vm/src/util.rs b/fuel-vm/src/util.rs
index e8348e7ce9..6b061779e7 100644
--- a/fuel-vm/src/util.rs
+++ b/fuel-vm/src/util.rs
@@ -364,6 +364,10 @@ pub mod test_helpers {
             self.consensus_params.block_gas_limit()
         }
 
+        pub fn get_privileged_address(&self) -> &Address {
+            self.consensus_params.privileged_address()
+        }
+
         pub fn get_chain_id(&self) -> ChainId {
             self.consensus_params.chain_id()
         }