diff --git a/package.json b/package.json
index 042aeb7..6bdf901 100644
--- a/package.json
+++ b/package.json
@@ -1,6 +1,6 @@
 {
   "name": "routstrd",
-  "version": "0.3.6",
+  "version": "0.3.7",
   "module": "src/index.ts",
   "type": "module",
   "private": false,
@@ -24,7 +24,7 @@
   },
   "dependencies": {
     "@cashu/cashu-ts": "^4.3.0",
-    "@routstr/sdk": "^0.3.14",
+    "@routstr/sdk": "^0.3.15",
     "applesauce-core": "^5.1.0",
     "applesauce-relay": "^5.1.0",
     "applesauce-wallet-connect": "^6.0.0",
diff --git a/src/cli.ts b/src/cli.ts
index 586b000..06cdd90 100644
--- a/src/cli.ts
+++ b/src/cli.ts
@@ -103,6 +103,130 @@ async function installCocodOrExit(): Promise<void> {
   console.log("cocod installed successfully.");
 }
 
+/**
+ * Restart the routstrd and cocod daemons after an update so the new
+ * binaries take effect immediately.  Failures are collected and reported
+ * but never roll back the update itself.
+ */
+async function restartDaemonsAfterUpdate(): Promise<void> {
+  const config = await loadConfig();
+  const isRemote = !!config.daemonUrl;
+  const failures: string[] = [];
+
+  // --- routstrd daemon ---
+  if (isRemote) {
+    console.log("\nUsing remote daemon — skipping routstrd daemon restart.");
+  } else {
+    try {
+      const wasRunning = await isDaemonRunning();
+      if (!wasRunning) {
+        console.log("\nroutstrd daemon was not running — skipping restart.");
+      } else {
+        console.log("\nRestarting routstrd daemon...");
+
+        // Graceful stop — the /stop endpoint closes the HTTP server
+        // (draining active connections) then exits.
+        await callDaemon("/stop", { method: "POST" });
+
+        for (let i = 0; i < 50; i++) {
+          await new Promise((resolve) => setTimeout(resolve, 100));
+          if (!(await isDaemonRunning())) break;
+        }
+
+        if (await isDaemonRunning()) {
+          throw new Error("routstrd did not stop within 5 seconds");
+        }
+        console.log("routstrd daemon stopped.");
+
+        console.log("Starting routstrd daemon...");
+        await startDaemon({
+          port: String(config.port || 8008),
+          provider: config.provider || undefined,
+        });
+        console.log("routstrd daemon restarted.");
+      }
+    } catch (error) {
+      const msg = error instanceof Error ? error.message : String(error);
+      failures.push(`routstrd daemon: ${msg}`);
+    }
+  }
+
+  // --- cocod daemon ---
+  try {
+    const cocodExecutable = resolveCocodExecutable(config.cocodPath);
+
+    // Check whether cocod is currently running.
+    const pingProc = Bun.spawn([cocodExecutable, "ping"], {
+      stdout: "ignore",
+      stderr: "ignore",
+    });
+    const cocodWasRunning = (await pingProc.exited) === 0;
+
+    if (!cocodWasRunning) {
+      console.log("\ncocod daemon was not running — skipping restart.");
+    } else {
+      console.log("\nRestarting cocod daemon...");
+
+      const stopProc = Bun.spawn([cocodExecutable, "stop"], {
+        stdout: "inherit",
+        stderr: "inherit",
+      });
+      const stopCode = await stopProc.exited;
+      if (stopCode !== 0) {
+        throw new Error(`cocod stop exited with code ${stopCode}`);
+      }
+      console.log("cocod daemon stopped.");
+
+      // Start cocod in the background (detached, like the wallet client does).
+      const env = { ...process.env };
+      const startProc = Bun.spawn([cocodExecutable, "daemon"], {
+        stdout: "ignore",
+        stderr: "ignore",
+        stdin: "ignore",
+        detached: true,
+        env,
+      });
+      startProc.unref?.();
+
+      // Poll until cocod responds to ping (max ~10 s).
+      let started = false;
+      for (let i = 0; i < 100; i++) {
+        await new Promise((resolve) => setTimeout(resolve, 100));
+        const poll = Bun.spawn([cocodExecutable, "ping"], {
+          stdout: "ignore",
+          stderr: "ignore",
+        });
+        if ((await poll.exited) === 0) {
+          started = true;
+          break;
+        }
+      }
+
+      if (!started) {
+        throw new Error("cocod did not come back up within 10 seconds");
+      }
+      console.log("cocod daemon restarted.");
+    }
+  } catch (error) {
+    const msg = error instanceof Error ? error.message : String(error);
+    failures.push(`cocod daemon: ${msg}`);
+  }
+
+  // --- report ---
+  if (failures.length > 0) {
+    console.error("\n⚠ Some daemons failed to restart:");
+    for (const f of failures) {
+      console.error(`  - ${f}`);
+    }
+    console.error(
+      "The update was applied but may not take effect until daemons are manually restarted.",
+    );
+    process.exit(1);
+  }
+
+  console.log("\n✓ All daemons restarted successfully.");
+}
+
 async function requireLocalDaemon(): Promise<void> {
   const config = await loadConfig();
   if (config.daemonUrl) {
@@ -264,6 +388,9 @@ program
     console.log("cocod updated successfully.\n");
 
     console.log("Both routstrd and cocod have been updated!");
+
+    // Restart daemons so the new binaries take effect immediately.
+    await restartDaemonsAfterUpdate();
   });
 
 program