diff --git a/channeldb/kvdb/etcd/db.go b/channeldb/kvdb/etcd/db.go
index a082e6109..3bd89c290 100644
--- a/channeldb/kvdb/etcd/db.go
+++ b/channeldb/kvdb/etcd/db.go
@@ -124,6 +124,9 @@ var _ walletdb.DB = (*db)(nil)
 
 // BackendConfig holds and etcd backend config and connection parameters.
 type BackendConfig struct {
+	// Ctx is the context we use to cancel operations upon exit.
+	Ctx context.Context
+
 	// Host holds the peer url of the etcd instance.
 	Host string
 
@@ -155,6 +158,10 @@ type BackendConfig struct {
 // newEtcdBackend returns a db object initialized with the passed backend
 // config. If etcd connection cannot be estabished, then returns error.
 func newEtcdBackend(config BackendConfig) (*db, error) {
+	if config.Ctx == nil {
+		config.Ctx = context.Background()
+	}
+
 	tlsInfo := transport.TLSInfo{
 		CertFile:           config.CertFile,
 		KeyFile:            config.KeyFile,
@@ -167,6 +174,7 @@ func newEtcdBackend(config BackendConfig) (*db, error) {
 	}
 
 	cli, err := clientv3.New(clientv3.Config{
+		Context:     config.Ctx,
 		Endpoints:   []string{config.Host},
 		DialTimeout: etcdConnectionTimeout,
 		Username:    config.User,
@@ -192,7 +200,8 @@ func newEtcdBackend(config BackendConfig) (*db, error) {
 
 // getSTMOptions creats all STM options based on the backend config.
 func (db *db) getSTMOptions() []STMOptionFunc {
-	opts := []STMOptionFunc{}
+	opts := []STMOptionFunc{WithAbortContext(db.config.Ctx)}
+
 	if db.config.CollectCommitStats {
 		opts = append(opts,
 			WithCommitStatsCallback(db.commitStatsCollector.callback),
@@ -257,9 +266,7 @@ func (db *db) BeginReadTx() (walletdb.ReadTx, error) {
 // start a read-only transaction to perform all operations.
 // This function is part of the walletdb.Db interface implementation.
 func (db *db) Copy(w io.Writer) error {
-	ctx := context.Background()
-
-	ctx, cancel := context.WithTimeout(ctx, etcdLongTimeout)
+	ctx, cancel := context.WithTimeout(db.config.Ctx, etcdLongTimeout)
 	defer cancel()
 
 	readCloser, err := db.cli.Snapshot(ctx)
diff --git a/channeldb/kvdb/etcd/db_test.go b/channeldb/kvdb/etcd/db_test.go
index 69342207a..155d912ec 100644
--- a/channeldb/kvdb/etcd/db_test.go
+++ b/channeldb/kvdb/etcd/db_test.go
@@ -4,6 +4,7 @@ package etcd
 
 import (
 	"bytes"
+	"context"
 	"testing"
 
 	"github.com/btcsuite/btcwallet/walletdb"
@@ -42,3 +43,33 @@ func TestCopy(t *testing.T) {
 	}
 	assert.Equal(t, expected, f.Dump())
 }
+
+func TestAbortContext(t *testing.T) {
+	t.Parallel()
+
+	f := NewEtcdTestFixture(t)
+	defer f.Cleanup()
+
+	ctx, cancel := context.WithCancel(context.Background())
+
+	config := f.BackendConfig()
+	config.Ctx = ctx
+
+	// Pass abort context and abort right away.
+	db, err := newEtcdBackend(config)
+	assert.NoError(t, err)
+	cancel()
+
+	// Expect that the update will fail.
+	err = db.Update(func(tx walletdb.ReadWriteTx) error {
+		_, err := tx.CreateTopLevelBucket([]byte("bucket"))
+		assert.NoError(t, err)
+
+		return nil
+	})
+
+	assert.Error(t, err, "context canceled")
+
+	// No changes in the DB.
+	assert.Equal(t, map[string]string{}, f.Dump())
+}
diff --git a/channeldb/kvdb/etcd/embed.go b/channeldb/kvdb/etcd/embed.go
index f19363f35..96ea71ab5 100644
--- a/channeldb/kvdb/etcd/embed.go
+++ b/channeldb/kvdb/etcd/embed.go
@@ -3,6 +3,7 @@
 package etcd
 
 import (
+	"context"
 	"fmt"
 	"net"
 	"net/url"
@@ -63,6 +64,7 @@ func NewEmbeddedEtcdInstance(path string) (*BackendConfig, func(), error) {
 	}
 
 	connConfig := &BackendConfig{
+		Ctx:                context.Background(),
 		Host:               "http://" + peerURL,
 		User:               "user",
 		Pass:               "pass",
diff --git a/channeldb/kvdb/etcd/stm.go b/channeldb/kvdb/etcd/stm.go
index b55e1227d..bf769d116 100644
--- a/channeldb/kvdb/etcd/stm.go
+++ b/channeldb/kvdb/etcd/stm.go
@@ -235,22 +235,32 @@ func runSTM(s *stm, apply func(STM) error) error {
 		err     error
 	)
 
-	// In a loop try to apply and commit and roll back
-	// if the database has changed (CommitError).
+loop:
+	// In a loop try to apply and commit and roll back if the database has
+	// changed (CommitError).
 	for {
-		// Abort STM if there was an application error.
+		select {
+		// Check if the STM is aborted and break the retry loop if it is.
+		case <-s.options.ctx.Done():
+			err = fmt.Errorf("aborted")
+			break loop
+
+		default:
+		}
+
+		// Apply the transaction closure and abort the STM if there was an
+		// application error.
 		if err = apply(s); err != nil {
-			break
+			break loop
 		}
 
 		stats, err = s.commit()
 
-		// Re-apply only upon commit error
-		// (meaning the database was changed).
+		// Re-apply only upon commit error (meaning the database was changed).
 		if _, ok := err.(CommitError); !ok {
 			// Anything that's not a CommitError
 			// aborts the STM run loop.
-			break
+			break loop
 		}
 
 		// Rollback before trying to re-apply.