diff --git a/changelog.md b/changelog.md
index 5c997caf9..c4dd09e7a 100644
--- a/changelog.md
+++ b/changelog.md
@@ -34,6 +34,7 @@ on how to create these new data sources see `node/src/main_chain_follower.rs` fi
 ## Added
 * Added `new_if_pallet_present` factory for the native token inherent data provider,
 allowing to selectively query main chain state based on runtime version
+* Added Largest-First coin selection algorithm.
 
 # 1.2.0
 
diff --git a/toolkit/offchain/src/collateral_selection.rs b/toolkit/offchain/src/collateral_selection.rs
new file mode 100644
index 000000000..8ce97215b
--- /dev/null
+++ b/toolkit/offchain/src/collateral_selection.rs
@@ -0,0 +1,77 @@
+use ogmios_client::types::*;
+
+pub const MIN_REQUIRED_COLLATERAL: u64 = 5_000_000;
+
+// Largest-First selection algorithm based on https://cips.cardano.org/cip/CIP-0002#largest-first
+pub fn largest_first(
+	inputs_available: &[OgmiosUtxo],
+	amount_required: u64,
+	max_collateral_inputs: u32,
+	min_required_collateral: u64,
+) -> Result<Vec<&OgmiosUtxo>, String> {
+	let amount_required = amount_required.max(min_required_collateral);
+	let amount_available: u64 = inputs_available.iter().map(|utxo| utxo.value.lovelace).sum();
+	if amount_available < amount_required {
+		return Err(format!("The available amount of lovelace ({amount_available}) is less than the required collateral amount ({amount_required})"));
+	}
+	let mut inputs_available_sorted = inputs_available.iter().collect::<Vec<_>>();
+	inputs_available_sorted
+		.sort_by(|utxo_a, utxo_b| utxo_a.value.lovelace.cmp(&utxo_b.value.lovelace));
+
+	let mut inputs_selected = Vec::new();
+	let mut sum = 0;
+	while sum < amount_required {
+		if let Some(utxo) = inputs_available_sorted.pop() {
+			sum += utxo.value.lovelace;
+			inputs_selected.push(utxo);
+		}
+	}
+
+	if inputs_selected.len() as u32 > max_collateral_inputs {
+		return Err(format!("Could not find {amount_required} lovelace required for collateral in the {max_collateral_inputs} maximum allowed inputs"));
+	}
+	Ok(inputs_selected)
+}
+
+#[cfg(test)]
+mod tests {
+	use super::*;
+
+	#[test]
+	fn fails_if_not_enough_utxos() {
+		assert_eq!(
+			largest_first(&utxos(), 111, 3, 10),
+			Err("The available amount of lovelace (110) is less than the required collateral amount (111)".to_string())
+		);
+	}
+
+	#[test]
+	fn fails_if_too_many_selected() {
+		assert_eq!(largest_first(&utxos(), 109, 3, 10), Err("Could not find 109 lovelace required for collateral in the 3 maximum allowed inputs".to_string()));
+	}
+
+	#[test]
+	fn succeeds() {
+		assert_eq!(largest_first(&utxos(), 55, 3, 10), Ok(vec![&mk_utxo(50), &mk_utxo(30)]));
+	}
+
+	fn mk_utxo(value: u64) -> OgmiosUtxo {
+		OgmiosUtxo {
+			transaction: OgmiosTx {
+				id: hex_literal::hex!(
+					"0000000000000000000000000000000000000000000000000000000000000000"
+				),
+			},
+			index: 0,
+			address: "address".to_string(),
+			value: OgmiosValue::new_lovelace(value),
+			datum: None,
+			datum_hash: None,
+			script: None,
+		}
+	}
+
+	fn utxos() -> Vec<OgmiosUtxo> {
+		vec![mk_utxo(10), mk_utxo(30), mk_utxo(20), mk_utxo(50)]
+	}
+}
diff --git a/toolkit/offchain/src/lib.rs b/toolkit/offchain/src/lib.rs
index f202a736d..92a20fff3 100644
--- a/toolkit/offchain/src/lib.rs
+++ b/toolkit/offchain/src/lib.rs
@@ -1,5 +1,7 @@
 //! Off-chain code for Partner Chains Smart Contracts and general purpose utilities related to Cardano
 
+/// Collateral selection algorithm
+pub mod collateral_selection;
 /// General purpose code for interacting with cardano-serialization-lib
 pub mod csl;
 /// Provides synthetized scripts data