diff --git a/CHANGELOG.md b/CHANGELOG.md
index 8a61454dad..3a93728558 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -31,6 +31,7 @@ for raising multiple issues that helped us improve the reliability of Hermes.
 - [gaiad-manager]
   - Import hermes keys properly even if wallet HD derivation path is set ([#975])
   - Apply default values to missing configuration parameters ([#993])
+  - `gm hermes config` now creates hermes 0.4.0 compatible configuration ([#1039])
 
 ### BREAKING CHANGES
 
@@ -50,6 +51,7 @@ for raising multiple issues that helped us improve the reliability of Hermes.
 [#1003]: https://github.com/informalsystems/ibc-rs/issues/1003
 [#1022]: https://github.com/informalsystems/ibc-rs/issues/1022
 [gaiad-manager]: https://github.com/informalsystems/ibc-rs/blob/master/scripts/gm/README.md
+[#1039]: https://github.com/informalsystems/ibc-rs/issues/1039
 
 ## v0.3.2
 *May 21st, 2021*
diff --git a/scripts/gm/CHANGELOG.md b/scripts/gm/CHANGELOG.md
index 1cf8e3d308..5970d1f0e2 100644
--- a/scripts/gm/CHANGELOG.md
+++ b/scripts/gm/CHANGELOG.md
@@ -1,5 +1,10 @@
 # Gaiad Manager Change Log
 
+## v0.0.4
+
+### FEATURES
+- Updated hermes configuration with the hermes 0.4.0 configuration parameters.
+
 ## v0.0.3
 
 ### BUGFIXES
diff --git a/scripts/gm/README.md b/scripts/gm/README.md
index 0ba133e88b..2719c4b690 100644
--- a/scripts/gm/README.md
+++ b/scripts/gm/README.md
@@ -114,8 +114,11 @@ the `gm.toml` file for node configuration. By default, newly created node config
   setting up the hermes configuration and are only used in the `hermes` sub-command.
 * `binary` - Path to the `hermes` binary to use.
 * `config` - The hermes configuration file path.
-* `strategy` - The hermes configuration strategy paremeter.
-* `log_level` - The hermes configuration log_level paremeter.
+* `strategy` - The hermes configuration strategy parameter.
+* `log_level` - The hermes configuration log_level parameter.
+* `telemetry_enabled` - The hermes configuration telemetry.enabled parameter.
+* `telemetry_host` - The hermes configuration telemetry.host parameter.
+* `telemetry_port` - The hermes configuration telemetry.port parameter.
 
 **Tribal knowledge**: (things they don't tell you)
 * the user is welcome to create additional nodes outside the scope of `gm` on the local machine but `gm` will only
diff --git a/scripts/gm/bin/lib-gm b/scripts/gm/bin/lib-gm
index ae5bb70fd0..d7251e0b7f 100644
--- a/scripts/gm/bin/lib-gm
+++ b/scripts/gm/bin/lib-gm
@@ -5,7 +5,7 @@ if [ "${DEBUG:-}" == "2" ]; then
 fi
 
 version() {
-  echo "v0.0.3"
+  echo "v0.0.4"
 }
 
 config_defaults() {
@@ -21,6 +21,9 @@ config_defaults() {
     GLOBAL_HERMES_CONFIG="${HOME}/.hermes/config.toml"
     GLOBAL_HERMES_STRATEGY="packets"
     GLOBAL_HERMES_LOG_LEVEL="info"
+    GLOBAL_HERMES_TELEMETRY_ENABLED="true"
+    GLOBAL_HERMES_TELEMETRY_HOST="127.0.0.1"
+    GLOBAL_HERMES_TELEMETRY_PORT="3001"
 }
 
 install() {
@@ -185,6 +188,9 @@ load_config() {
   GLOBAL_HERMES_CONFIG="$(eval echo "$(stoml -sq "$CONFIG_FILE" global.hermes.config || echo "$GLOBAL_HERMES_CONFIG")")"
   GLOBAL_HERMES_STRATEGY="$(stoml -sq "$CONFIG_FILE" global.hermes.strategy || echo "$GLOBAL_HERMES_STRATEGY")"
   GLOBAL_HERMES_LOG_LEVEL="$(stoml -sq "$CONFIG_FILE" global.hermes.log_level || echo "$GLOBAL_HERMES_LOG_LEVEL")"
+  GLOBAL_HERMES_TELEMETRY_ENABLED="$(stoml -sq "$CONFIG_FILE" global.hermes.telemetry_enabled || echo "$GLOBAL_HERMES_TELEMETRY_ENABLED")"
+  GLOBAL_HERMES_TELEMETRY_HOST="$(stoml -sq "$CONFIG_FILE" global.hermes.telemetry_host || echo "$GLOBAL_HERMES_TELEMETRY_HOST")"
+  GLOBAL_HERMES_TELEMETRY_PORT="$(stoml -sq "$CONFIG_FILE" global.hermes.telemetry_port || echo "$GLOBAL_HERMES_TELEMETRY_PORT")"
   export GLOBAL_GAIAD_BINARY
   export GLOBAL_HOME_DIR
   export GLOBAL_AUTO_MAINTAIN_CONFIG
@@ -195,6 +201,9 @@ load_config() {
   export GLOBAL_HERMES_CONFIG
   export GLOBAL_HERMES_STRATEGY
   export GLOBAL_HERMES_LOG_LEVEL
+  export GLOBAL_HERMES_TELEMETRY_ENABLED
+  export GLOBAL_HERMES_TELEMETRY_HOST
+  export GLOBAL_HERMES_TELEMETRY_PORT
   if [ "$FRESH_CONFIG" = "yes" ]; then
     write_default_config
     VALIDATORS=""
@@ -273,6 +282,9 @@ binary="$GLOBAL_HERMES_BINARY"
 config="$GLOBAL_HERMES_CONFIG"
 strategy="$GLOBAL_HERMES_STRATEGY"
 log_level="$GLOBAL_HERMES_LOG_LEVEL"
+telemetry_enabled="$GLOBAL_HERMES_TELEMETRY_ENABLED"
+telemetry_host="$GLOBAL_HERMES_TELEMETRY_HOST"
+telemetry_port="$GLOBAL_HERMES_TELEMETRY_PORT"
 
 EOF
   set -e
@@ -706,6 +718,11 @@ hermes_config() {
 strategy = '${GLOBAL_HERMES_STRATEGY}'
 log_level = '${GLOBAL_HERMES_LOG_LEVEL}'
 
+[telemetry]
+enabled = ${GLOBAL_HERMES_TELEMETRY_ENABLED}
+host = '${GLOBAL_HERMES_TELEMETRY_HOST}'
+port = ${GLOBAL_HERMES_TELEMETRY_PORT}
+
 EOF
   for i in $ALL_NODES
   do
@@ -726,6 +743,10 @@ account_prefix='cosmos'
 key_name='wallet'
 store_prefix='ibc'
 fee_denom='stake'
+fee_amount=1000
+gas=300000
+clock_drift='5s'
+trusting_period='14days'
 
 [chains.trust_threshold]
 numerator = '1'
diff --git a/scripts/gm/gm.toml b/scripts/gm/gm.toml
index 637f2f895f..5221ff7644 100644
--- a/scripts/gm/gm.toml
+++ b/scripts/gm/gm.toml
@@ -41,6 +41,15 @@ strategy="packets"
 # Hermes configuration log_level parameter.
 log_level="info"
 
+# Hermes configuration telemetry.enabled parameter.
+telemetry_enabled=true
+
+# Hermes configuration telemetry.host parameter.
+telemetry_host='127.0.0.1'
+
+# Hermes configuration telemetry.port parameter.
+telemetry_port=3001
+
 ##
 ## Sub-section (node) definitions and parameter redefinitons below.
 ##