diff --git a/.github/workflows/test-localnet.yml b/.github/workflows/test-localnet.yml
index 1faa2689..61cdae4c 100644
--- a/.github/workflows/test-localnet.yml
+++ b/.github/workflows/test-localnet.yml
@@ -40,8 +40,8 @@ jobs:
         run: |
           # Start the local testnet with mxpy
           mkdir -p ~/localnet && cd ~/localnet
-          mxpy localnet setup
-          nohup mxpy localnet start > localnet.log 2>&1 & echo $! > localnet.pid
+          mxpy localnet setup --configfile=${GITHUB_WORKSPACE}/localnet.toml
+          nohup mxpy localnet start --configfile=${GITHUB_WORKSPACE}/localnet.toml > localnet.log 2>&1 & echo $! > localnet.pid
           sleep 120 # Allow time for the testnet to fully start
 
       # Step 6: Install Node.js and dependencies
diff --git a/.npmignore b/.npmignore
index 565b2be5..f40235d5 100644
--- a/.npmignore
+++ b/.npmignore
@@ -1,2 +1,3 @@
 src/testdata/**
 src/testutils/**
+localnet.toml
diff --git a/localnet.toml b/localnet.toml
new file mode 100644
index 00000000..27b77791
--- /dev/null
+++ b/localnet.toml
@@ -0,0 +1,41 @@
+[general]
+log_level = "*:DEBUG"
+genesis_delay_seconds = 10
+rounds_per_epoch = 50
+round_duration_milliseconds = 6000
+
+[metashard]
+consensus_size = 1
+num_observers = 0
+num_validators = 1
+
+[shards]
+num_shards = 3
+consensus_size = 1
+num_observers_per_shard = 0
+num_validators_per_shard = 1
+
+[networking]
+host = "127.0.0.1"
+port_seednode = 9999
+port_seednode_rest_api = 10000
+p2p_id_seednode = "16Uiu2HAkx4QqgXXDdHdUWbLu5kxhd3Uo2hqB2FfCxmxH5Sd7bZFk"
+port_proxy = 7950
+port_first_observer = 21100
+port_first_observer_rest_api = 10100
+port_first_validator = 21500
+port_first_validator_rest_api = 10200
+
+[software.mx_chain_go]
+resolution = "remote"
+archive_url = "https://github.com/multiversx/mx-chain-go/archive/refs/heads/master.zip"
+archive_download_folder = "~/multiversx-sdk/localnet_software_remote/downloaded/mx-chain-go"
+archive_extraction_folder = "~/multiversx-sdk/localnet_software_remote/extracted/mx-chain-go"
+local_path = "~/multiversx-sdk/localnet_software_local/mx-chain-go"
+
+[software.mx_chain_proxy_go]
+resolution = "remote"
+archive_url = "https://github.com/multiversx/mx-chain-proxy-go/archive/refs/heads/master.zip"
+archive_download_folder = "~/multiversx-sdk/localnet_software_remote/downloaded/mx-chain-proxy-go"
+archive_extraction_folder = "~/multiversx-sdk/localnet_software_remote/extracted/mx-chain-proxy-go"
+local_path = "~/multiversx-sdk/localnet_software_local/mx-chain-proxy-go"