diff --git a/apps/emqx/priv/bpapi.versions b/apps/emqx/priv/bpapi.versions
index 12e70e36a..d1176e7ac 100644
--- a/apps/emqx/priv/bpapi.versions
+++ b/apps/emqx/priv/bpapi.versions
@@ -14,6 +14,7 @@
 {emqx_gateway_cm,1}.
 {emqx_gateway_http,1}.
 {emqx_license,1}.
+{emqx_license,2}.
 {emqx_management,1}.
 {emqx_management,2}.
 {emqx_mgmt_api_plugins,1}.
diff --git a/apps/emqx/test/emqx_common_test_helpers.erl b/apps/emqx/test/emqx_common_test_helpers.erl
index d0ee99d6d..b3292ded3 100644
--- a/apps/emqx/test/emqx_common_test_helpers.erl
+++ b/apps/emqx/test/emqx_common_test_helpers.erl
@@ -595,6 +595,7 @@ setup_node(Node, Opts) when is_map(Opts) ->
     EnvHandler = maps:get(env_handler, Opts, fun(_) -> ok end),
     ConfigureGenRpc = maps:get(configure_gen_rpc, Opts, true),
     LoadSchema = maps:get(load_schema, Opts, true),
+    SchemaMod = maps:get(schema_mod, Opts, emqx_schema),
     LoadApps = maps:get(load_apps, Opts, [gen_rpc, emqx, ekka, mria] ++ Apps),
     Env = maps:get(env, Opts, []),
     Conf = maps:get(conf, Opts, []),
@@ -630,7 +631,7 @@ setup_node(Node, Opts) when is_map(Opts) ->
             %% Otherwise, configuration get's loaded and all preset env in envhandler is lost
             LoadSchema andalso
                 begin
-                    emqx_config:init_load(emqx_schema),
+                    emqx_config:init_load(SchemaMod),
                     application:set_env(emqx, init_config_load_done, true)
                 end,
 
diff --git a/bin/emqx b/bin/emqx
index cac5cf655..a70c676fd 100755
--- a/bin/emqx
+++ b/bin/emqx
@@ -416,7 +416,7 @@ call_hocon() {
 ## and parsing HOCON config + environment variables is a non-trivial task
 CONF_KEYS=( 'node.data_dir' 'node.name' 'node.cookie' 'node.db_backend' 'cluster.proto_dist' )
 if [ "$IS_ENTERPRISE" = 'yes' ]; then
-    CONF_KEYS+=( 'license.file' 'license.key' )
+    CONF_KEYS+=( 'license.type' 'license.file' 'license.key' )
 fi
 
 if [ "$IS_BOOT_COMMAND" = 'yes' ]; then
diff --git a/bin/nodetool b/bin/nodetool
index 773f855a0..0711f32d6 100755
--- a/bin/nodetool
+++ b/bin/nodetool
@@ -25,9 +25,9 @@ main(Args) ->
             %% forward the call to hocon_cli
             hocon_cli:main(Rest);
         ["check_license_key", Key] ->
-            check_license(#{key => list_to_binary(Key)});
+            check_license(#{type => key, key => list_to_binary(Key)});
         ["check_license_file", File] ->
-            check_license(#{file => list_to_binary(File)});
+            check_license(#{type => file, file => list_to_binary(File)});
         _ ->
             do(Args)
     end.
diff --git a/lib-ee/emqx_license/etc/emqx_license.conf b/lib-ee/emqx_license/etc/emqx_license.conf
index 476444ea0..b5684b740 100644
--- a/lib-ee/emqx_license/etc/emqx_license.conf
+++ b/lib-ee/emqx_license/etc/emqx_license.conf
@@ -1,4 +1,5 @@
 license {
+    type = key
     # The default license has 1000 connections limit, it is issued on 20220419 and valid for 5 years (1825 days)
     key = "MjIwMTExCjAKMTAKRXZhbHVhdGlvbgpjb250YWN0QGVtcXguaW8KZGVmYXVsdAoyMDIyMDQxOQoxODI1CjEwMDAK.MEQCICbgRVijCQov2hrvZXR1mk9Oa+tyV1F5oJ6iOZeSHjnQAiB9dUiVeaZekDOjztk+NCWjhk4PG8tWfw2uFZWruSzD6g=="
     connection_low_watermark = 75%,
diff --git a/lib-ee/emqx_license/src/emqx_license.app.src b/lib-ee/emqx_license/src/emqx_license.app.src
index 7d10277d8..9aba01e96 100644
--- a/lib-ee/emqx_license/src/emqx_license.app.src
+++ b/lib-ee/emqx_license/src/emqx_license.app.src
@@ -1,6 +1,6 @@
 {application, emqx_license, [
     {description, "EMQX License"},
-    {vsn, "5.0.0"},
+    {vsn, "5.0.1"},
     {modules, []},
     {registered, [emqx_license_sup]},
     {applications, [kernel, stdlib]},
diff --git a/lib-ee/emqx_license/src/emqx_license.erl b/lib-ee/emqx_license/src/emqx_license.erl
index 787a8b283..24b2cc709 100644
--- a/lib-ee/emqx_license/src/emqx_license.erl
+++ b/lib-ee/emqx_license/src/emqx_license.erl
@@ -22,7 +22,9 @@
     read_license/0,
     read_license/1,
     update_file/1,
-    update_key/1
+    update_key/1,
+    license_dir/0,
+    save_and_backup_license/1
 ]).
 
 -define(CONF_KEY_PATH, [license]).
@@ -54,15 +56,29 @@ unload() ->
     emqx_conf:remove_handler(?CONF_KEY_PATH),
     emqx_license_cli:unload().
 
+-spec license_dir() -> file:filename().
+license_dir() ->
+    filename:join([emqx:data_dir(), licenses]).
+
+%% Subdirectory relative to data dir.
+-spec relative_license_path() -> file:filename().
+relative_license_path() ->
+    filename:join([licenses, "emqx.lic"]).
+
 -spec update_file(binary() | string()) ->
     {ok, emqx_config:update_result()} | {error, emqx_config:update_error()}.
 update_file(Filename) when is_binary(Filename); is_list(Filename) ->
-    Result = emqx_conf:update(
-        ?CONF_KEY_PATH,
-        {file, Filename},
-        #{rawconf_with_defaults => true, override_to => local}
-    ),
-    handle_config_update_result(Result).
+    case file:read_file(Filename) of
+        {ok, Contents} ->
+            Result = emqx_conf:update(
+                ?CONF_KEY_PATH,
+                {file, Contents},
+                #{rawconf_with_defaults => true, override_to => local}
+            ),
+            handle_config_update_result(Result);
+        {error, Error} ->
+            {error, Error}
+    end.
 
 -spec update_key(binary() | string()) ->
     {ok, emqx_config:update_result()} | {error, emqx_config:update_error()}.
@@ -125,22 +141,18 @@ del_license_hook() ->
     _ = emqx_hooks:del('client.connect', {?MODULE, check, []}),
     ok.
 
-do_update({file, Filename}, Conf) ->
-    case file:read_file(Filename) of
-        {ok, Content} ->
-            case emqx_license_parser:parse(Content) of
-                {ok, _License} ->
-                    maps:remove(<<"key">>, Conf#{<<"file">> => Filename});
-                {error, Reason} ->
-                    erlang:throw(Reason)
-            end;
-        {error, Reason} ->
-            erlang:throw({invalid_license_file, Reason})
-    end;
+do_update({file, NewContents}, Conf) ->
+    Res = emqx_license_proto_v2:save_and_backup_license(mria_mnesia:running_nodes(), NewContents),
+    %% assert
+    true = lists:all(fun(X) -> X =:= {ok, ok} end, Res),
+    %% Must be relative to the data dir, since different nodes might
+    %% have different data directories configured...
+    LicensePath = relative_license_path(),
+    maps:remove(<<"key">>, Conf#{<<"type">> => file, <<"file">> => LicensePath});
 do_update({key, Content}, Conf) when is_binary(Content); is_list(Content) ->
     case emqx_license_parser:parse(Content) of
         {ok, _License} ->
-            maps:remove(<<"file">>, Conf#{<<"key">> => Content});
+            maps:remove(<<"file">>, Conf#{<<"type">> => key, <<"key">> => Content});
         {error, Reason} ->
             erlang:throw(Reason)
     end;
@@ -148,17 +160,61 @@ do_update({key, Content}, Conf) when is_binary(Content); is_list(Content) ->
 do_update(_Other, Conf) ->
     Conf.
 
+save_and_backup_license(NewLicenseKey) ->
+    %% Must be relative to the data dir, since different nodes might
+    %% have different data directories configured...
+    CurrentLicensePath = filename:join(emqx:data_dir(), relative_license_path()),
+    LicenseDir = filename:dirname(CurrentLicensePath),
+    case filelib:ensure_dir(CurrentLicensePath) of
+        ok -> ok;
+        {error, EnsureError} -> throw({error_creating_license_dir, EnsureError})
+    end,
+    case file:read_file(CurrentLicensePath) of
+        {ok, NewLicenseKey} ->
+            %% same contents; nothing to do.
+            ok;
+        {ok, _OldContents} ->
+            Time = calendar:system_time_to_rfc3339(erlang:system_time(second)),
+            BackupPath = filename:join([
+                LicenseDir,
+                "emqx.lic." ++ Time ++ ".backup"
+            ]),
+            case file:copy(CurrentLicensePath, BackupPath) of
+                {ok, _} -> ok;
+                {error, CopyError} -> throw({error_backing_up_license, CopyError})
+            end,
+            ok;
+        {error, enoent} ->
+            ok;
+        {error, Error} ->
+            throw({error_reading_existing_license, Error})
+    end,
+    case file:write_file(CurrentLicensePath, NewLicenseKey) of
+        ok -> ok;
+        {error, WriteError} -> throw({error_writing_license, WriteError})
+    end,
+    ok.
+
 check_max_clients_exceeded(MaxClients) ->
     emqx_license_resources:connection_count() > MaxClients * 1.1.
 
-read_license(#{file := Filename}) ->
+read_license(#{type := file, file := Filename}) ->
     case file:read_file(Filename) of
-        {ok, Content} -> emqx_license_parser:parse(Content);
-        {error, _} = Error -> Error
+        {ok, Content} ->
+            emqx_license_parser:parse(Content);
+        {error, _} = Error ->
+            %% Could be a relative path in data folder after update.
+            FilenameDataDir = filename:join(emqx:data_dir(), Filename),
+            case file:read_file(FilenameDataDir) of
+                {ok, Content} -> emqx_license_parser:parse(Content);
+                _Error -> Error
+            end
     end;
-read_license(#{key := Content}) ->
+read_license(#{type := key, key := Content}) ->
     emqx_license_parser:parse(Content).
 
+handle_config_update_result({error, {post_config_update, ?MODULE, Error}}) ->
+    {error, Error};
 handle_config_update_result({error, _} = Error) ->
     Error;
 handle_config_update_result({ok, #{post_config_update := #{emqx_license := Result}}}) ->
diff --git a/lib-ee/emqx_license/src/emqx_license_resources.erl b/lib-ee/emqx_license/src/emqx_license_resources.erl
index 551601923..4aaf853a3 100644
--- a/lib-ee/emqx_license/src/emqx_license_resources.erl
+++ b/lib-ee/emqx_license/src/emqx_license_resources.erl
@@ -128,6 +128,6 @@ ensure_timer(#{check_peer_interval := CheckInterval} = State) ->
 
 remote_connection_count() ->
     Nodes = mria_mnesia:running_nodes() -- [node()],
-    Results = emqx_license_proto_v1:remote_connection_counts(Nodes),
+    Results = emqx_license_proto_v2:remote_connection_counts(Nodes),
     Counts = [Count || {ok, Count} <- Results],
     lists:sum(Counts).
diff --git a/lib-ee/emqx_license/src/emqx_license_schema.erl b/lib-ee/emqx_license/src/emqx_license_schema.erl
index d6517ab88..88d245eb3 100644
--- a/lib-ee/emqx_license/src/emqx_license_schema.erl
+++ b/lib-ee/emqx_license/src/emqx_license_schema.erl
@@ -14,14 +14,15 @@
 
 -export([roots/0, fields/1, validations/0, desc/1]).
 
+-export([
+    license_type/0
+]).
+
 roots() ->
     [
         {license,
             hoconsc:mk(
-                hoconsc:union([
-                    hoconsc:ref(?MODULE, key_license),
-                    hoconsc:ref(?MODULE, file_license)
-                ]),
+                license_type(),
                 #{
                     desc =>
                         "EMQX Enterprise license.\n"
@@ -36,16 +37,35 @@ roots() ->
 
 fields(key_license) ->
     [
+        {type, #{
+            type => key,
+            required => true
+        }},
         {key, #{
             type => string(),
             %% so it's not logged
             sensitive => true,
+            required => true,
             desc => "License string"
+        }},
+        {file, #{
+            type => string(),
+            required => false
         }}
         | common_fields()
     ];
 fields(file_license) ->
     [
+        {type, #{
+            type => file,
+            required => true
+        }},
+        {key, #{
+            type => string(),
+            %% so it's not logged
+            sensitive => true,
+            required => false
+        }},
         {file, #{
             type => string(),
             desc => "Path to the license file"
@@ -77,6 +97,12 @@ common_fields() ->
 validations() ->
     [{check_license_watermark, fun check_license_watermark/1}].
 
+license_type() ->
+    hoconsc:union([
+        hoconsc:ref(?MODULE, key_license),
+        hoconsc:ref(?MODULE, file_license)
+    ]).
+
 check_license_watermark(Conf) ->
     case hocon_maps:get("license.connection_low_watermark", Conf) of
         undefined ->
diff --git a/lib-ee/emqx_license/src/proto/emqx_license_proto_v2.erl b/lib-ee/emqx_license/src/proto/emqx_license_proto_v2.erl
new file mode 100644
index 000000000..6af1cea77
--- /dev/null
+++ b/lib-ee/emqx_license/src/proto/emqx_license_proto_v2.erl
@@ -0,0 +1,30 @@
+%%--------------------------------------------------------------------
+%% Copyright (c) 2022 EMQ Technologies Co., Ltd. All Rights Reserved.
+%%--------------------------------------------------------------------
+
+-module(emqx_license_proto_v2).
+
+-behaviour(emqx_bpapi).
+
+-include_lib("emqx/include/bpapi.hrl").
+
+-export([introduced_in/0]).
+
+-export([
+    remote_connection_counts/1,
+    save_and_backup_license/2
+]).
+
+-define(TIMEOUT, 500).
+-define(BACKUP_TIMEOUT, 15_000).
+
+introduced_in() ->
+    "5.0.5".
+
+-spec remote_connection_counts(list(node())) -> list({atom(), term()}).
+remote_connection_counts(Nodes) ->
+    erpc:multicall(Nodes, emqx_license_resources, local_connection_count, [], ?TIMEOUT).
+
+-spec save_and_backup_license(list(node()), binary()) -> list({atom(), term()}).
+save_and_backup_license(Nodes, NewLicenseKey) ->
+    erpc:multicall(Nodes, emqx_license, save_and_backup_license, [NewLicenseKey], ?BACKUP_TIMEOUT).
diff --git a/lib-ee/emqx_license/test/emqx_license_SUITE.erl b/lib-ee/emqx_license/test/emqx_license_SUITE.erl
index bc73f9071..a648595d2 100644
--- a/lib-ee/emqx_license/test/emqx_license_SUITE.erl
+++ b/lib-ee/emqx_license/test/emqx_license_SUITE.erl
@@ -28,39 +28,190 @@ end_per_suite(_) ->
 init_per_testcase(Case, Config) ->
     {ok, _} = emqx_cluster_rpc:start_link(node(), emqx_cluster_rpc, 1000),
     set_invalid_license_file(Case),
-    Config.
+    Paths = set_override_paths(Case),
+    Config0 = setup_test(Case, Config),
+    Paths ++ Config0 ++ Config.
 
-end_per_testcase(Case, _Config) ->
+end_per_testcase(Case, Config) ->
     restore_valid_license_file(Case),
+    clean_overrides(Case, Config),
+    teardown_test(Case, Config),
+    ok.
+
+set_override_paths(TestCase) when
+    TestCase =:= t_change_from_file_to_key;
+    TestCase =:= t_change_from_key_to_file
+->
+    LocalOverridePath = filename:join([
+        "/tmp",
+        "local-" ++ atom_to_list(TestCase) ++ ".conf"
+    ]),
+    ClusterOverridePath = filename:join([
+        "/tmp",
+        "local-" ++ atom_to_list(TestCase) ++ ".conf"
+    ]),
+    application:set_env(emqx, local_override_conf_file, LocalOverridePath),
+    application:set_env(emqx, cluster_override_conf_file, ClusterOverridePath),
+    [
+        {local_override_path, LocalOverridePath},
+        {cluster_override_path, ClusterOverridePath}
+    ];
+set_override_paths(_TestCase) ->
+    [].
+
+clean_overrides(TestCase, Config) when
+    TestCase =:= t_change_from_file_to_key;
+    TestCase =:= t_change_from_key_to_file
+->
+    LocalOverridePath = ?config(local_override_path, Config),
+    ClusterOverridePath = ?config(cluster_override_path, Config),
+    file:delete(LocalOverridePath),
+    file:delete(ClusterOverridePath),
+    application:unset_env(emqx, local_override_conf_file),
+    application:unset_env(emqx, cluster_override_conf_file),
+    ok;
+clean_overrides(_TestCase, _Config) ->
+    ok.
+
+setup_test(TestCase, Config) when
+    TestCase =:= t_update_file_cluster_backup
+->
+    DataDir = ?config(data_dir, Config),
+    {LicenseKey, _License} = mk_license(
+        [
+            %% license format version
+            "220111",
+            %% license type
+            "0",
+            %% customer type
+            "10",
+            %% customer name
+            "Foo",
+            %% customer email
+            "contact@foo.com",
+            %% deplayment name
+            "bar-deployment",
+            %% start date
+            "20220111",
+            %% days
+            "100000",
+            %% max connections
+            "19"
+        ]
+    ),
+    Cluster = emqx_common_test_helpers:emqx_cluster(
+        [core, core],
+        [
+            {apps, [emqx_conf, emqx_license]},
+            {load_schema, false},
+            {schema_mod, emqx_enterprise_conf_schema},
+            {env_handler, fun
+                (emqx) ->
+                    emqx_config:save_schema_mod_and_names(emqx_enterprise_conf_schema),
+                    %% emqx_config:save_schema_mod_and_names(emqx_license_schema),
+                    application:set_env(emqx, boot_modules, []),
+                    application:set_env(
+                        emqx,
+                        data_dir,
+                        filename:join([
+                            DataDir,
+                            TestCase,
+                            node()
+                        ])
+                    ),
+                    ok;
+                (emqx_conf) ->
+                    emqx_config:save_schema_mod_and_names(emqx_enterprise_conf_schema),
+                    %% emqx_config:save_schema_mod_and_names(emqx_license_schema),
+                    application:set_env(
+                        emqx,
+                        data_dir,
+                        filename:join([
+                            DataDir,
+                            TestCase,
+                            node()
+                        ])
+                    ),
+                    ok;
+                (emqx_license) ->
+                    LicensePath = filename:join(emqx_license:license_dir(), "emqx.lic"),
+                    filelib:ensure_dir(LicensePath),
+                    ok = file:write_file(LicensePath, LicenseKey),
+                    LicConfig = #{type => file, file => LicensePath},
+                    emqx_config:put([license], LicConfig),
+                    RawConfig = #{<<"type">> => file, <<"file">> => LicensePath},
+                    emqx_config:put_raw([<<"license">>], RawConfig),
+                    ok = meck:new(emqx_license, [non_strict, passthrough, no_history, no_link]),
+                    %% meck:expect(emqx_license, read_license, fun() -> {ok, License} end),
+                    meck:expect(
+                        emqx_license_parser,
+                        parse,
+                        fun(X) ->
+                            emqx_license_parser:parse(
+                                X,
+                                emqx_license_test_lib:public_key_pem()
+                            )
+                        end
+                    ),
+                    ok;
+                (_) ->
+                    ok
+            end}
+        ]
+    ),
+    Nodes = [emqx_common_test_helpers:start_slave(Name, Opts) || {Name, Opts} <- Cluster],
+    [{nodes, Nodes}, {cluster, Cluster}, {old_license, LicenseKey}];
+setup_test(_TestCase, _Config) ->
+    [].
+
+teardown_test(TestCase, Config) when
+    TestCase =:= t_update_file_cluster_backup
+->
+    Nodes = ?config(nodes, Config),
+    lists:foreach(
+        fun(N) ->
+            LicenseDir = erpc:call(N, emqx_license, license_dir, []),
+            {ok, _} = emqx_common_test_helpers:stop_slave(N),
+            ok = file:del_dir_r(LicenseDir),
+            ok
+        end,
+        Nodes
+    ),
+    ok;
+teardown_test(_TestCase, _Config) ->
     ok.
 
 set_invalid_license_file(t_read_license_from_invalid_file) ->
-    Config = #{file => "/invalid/file"},
+    Config = #{type => file, file => "/invalid/file"},
     emqx_config:put([license], Config);
 set_invalid_license_file(_) ->
     ok.
 
 restore_valid_license_file(t_read_license_from_invalid_file) ->
-    Config = #{file => emqx_license_test_lib:default_license()},
+    Config = #{type => file, file => emqx_license_test_lib:default_license()},
     emqx_config:put([license], Config);
 restore_valid_license_file(_) ->
     ok.
 
 set_special_configs(emqx_license) ->
-    Config = #{file => emqx_license_test_lib:default_license()},
+    Config = #{type => file, file => emqx_license_test_lib:default_license()},
     emqx_config:put([license], Config),
-    RawConfig = #{<<"file">> => emqx_license_test_lib:default_license()},
+    RawConfig = #{<<"type">> => file, <<"file">> => emqx_license_test_lib:default_license()},
     emqx_config:put_raw([<<"license">>], RawConfig);
 set_special_configs(_) ->
     ok.
 
+assert_on_nodes(Nodes, RunFun, CheckFun) ->
+    Res = [{N, erpc:call(N, RunFun)} || N <- Nodes],
+    lists:foreach(CheckFun, Res).
+
 %%------------------------------------------------------------------------------
 %% Tests
 %%------------------------------------------------------------------------------
 
 t_update_file(_Config) ->
     ?assertMatch(
-        {error, {invalid_license_file, enoent}},
+        {error, enoent},
         emqx_license:update_file("/unknown/path")
     ),
 
@@ -75,6 +226,115 @@ t_update_file(_Config) ->
         emqx_license:update_file(emqx_license_test_lib:default_license())
     ).
 
+t_update_file_cluster_backup(Config) ->
+    OldLicenseKey = ?config(old_license, Config),
+    Nodes = [N1 | _] = ?config(nodes, Config),
+
+    %% update the license file for the cluster
+    {NewLicenseKey, NewDecodedLicense} = mk_license(
+        [
+            %% license format version
+            "220111",
+            %% license type
+            "0",
+            %% customer type
+            "10",
+            %% customer name
+            "Foo",
+            %% customer email
+            "contact@foo.com",
+            %% deplayment name
+            "bar-deployment",
+            %% start date
+            "20220111",
+            %% days
+            "100000",
+            %% max connections
+            "190"
+        ]
+    ),
+    NewLicensePath = "tmp_new_license.lic",
+    ok = file:write_file(NewLicensePath, NewLicenseKey),
+    {ok, _} = erpc:call(N1, emqx_license, update_file, [NewLicensePath]),
+
+    assert_on_nodes(
+        Nodes,
+        fun() ->
+            Conf = emqx_conf:get([license]),
+            emqx_license:read_license(Conf)
+        end,
+        fun({N, Res}) ->
+            ?assertMatch({ok, _}, Res, #{node => N}),
+            {ok, License} = Res,
+            ?assertEqual(NewDecodedLicense, License, #{node => N})
+        end
+    ),
+
+    assert_on_nodes(
+        Nodes,
+        fun() ->
+            LicenseDir = emqx_license:license_dir(),
+            file:list_dir(LicenseDir)
+        end,
+        fun({N, Res}) ->
+            ?assertMatch({ok, _}, Res, #{node => N}),
+            {ok, DirContents} = Res,
+            %% the now current license
+            ?assert(lists:member("emqx.lic", DirContents), #{node => N, dir_contents => DirContents}),
+            %% the backed up old license
+            ?assert(
+                lists:any(
+                    fun
+                        ("emqx.lic." ++ Suffix) -> lists:suffix(".backup", Suffix);
+                        (_) -> false
+                    end,
+                    DirContents
+                ),
+                #{node => N, dir_contents => DirContents}
+            )
+        end
+    ),
+
+    assert_on_nodes(
+        Nodes,
+        fun() ->
+            LicenseDir = emqx_license:license_dir(),
+            {ok, DirContents} = file:list_dir(LicenseDir),
+            [BackupLicensePath0] = [
+                F
+             || "emqx.lic." ++ F <- DirContents, lists:suffix(".backup", F)
+            ],
+            BackupLicensePath = "emqx.lic." ++ BackupLicensePath0,
+            {ok, BackupLicense} = file:read_file(filename:join(LicenseDir, BackupLicensePath)),
+            {ok, NewLicense} = file:read_file(filename:join(LicenseDir, "emqx.lic")),
+            #{
+                backup => BackupLicense,
+                new => NewLicense
+            }
+        end,
+        fun({N, #{backup := BackupLicense, new := NewLicense}}) ->
+            ?assertEqual(OldLicenseKey, BackupLicense, #{node => N}),
+            ?assertEqual(NewLicenseKey, NewLicense, #{node => N})
+        end
+    ),
+
+    %% uploading the same license twice should not generate extra backups.
+    {ok, _} = erpc:call(N1, emqx_license, update_file, [NewLicensePath]),
+
+    assert_on_nodes(
+        Nodes,
+        fun() ->
+            LicenseDir = emqx_license:license_dir(),
+            {ok, DirContents} = file:list_dir(LicenseDir),
+            [F || "emqx.lic." ++ F <- DirContents, lists:suffix(".backup", F)]
+        end,
+        fun({N, Backups}) ->
+            ?assertMatch([_], Backups, #{node => N})
+        end
+    ),
+
+    ok.
+
 t_update_value(_Config) ->
     ?assertMatch(
         {error, [_ | _]},
@@ -95,7 +355,7 @@ t_read_license_from_invalid_file(_Config) ->
     ).
 
 t_check_exceeded(_Config) ->
-    License = mk_license(
+    {_, License} = mk_license(
         [
             "220111",
             "0",
@@ -124,7 +384,7 @@ t_check_exceeded(_Config) ->
     ).
 
 t_check_ok(_Config) ->
-    License = mk_license(
+    {_, License} = mk_license(
         [
             "220111",
             "0",
@@ -153,7 +413,7 @@ t_check_ok(_Config) ->
     ).
 
 t_check_expired(_Config) ->
-    License = mk_license(
+    {_, License} = mk_license(
         [
             "220111",
             %% Official customer
@@ -183,6 +443,39 @@ t_check_not_loaded(_Config) ->
         emqx_license:check(#{}, #{})
     ).
 
+t_change_from_file_to_key(_Config) ->
+    %% precondition
+    ?assertMatch(#{file := _}, emqx_conf:get([license])),
+
+    OldConf = emqx_conf:get_raw([]),
+
+    %% this saves updated config to `{cluster,local}-overrrides.conf'
+    {ok, LicenseValue} = file:read_file(emqx_license_test_lib:default_license()),
+    {ok, _NewConf} = emqx_license:update_key(LicenseValue),
+
+    %% assert that `{cluster,local}-overrides.conf' merge correctly
+    ?assertEqual(ok, emqx_config:init_load(emqx_license_schema, OldConf, #{})),
+
+    ok.
+
+t_change_from_key_to_file(_Config) ->
+    Config = #{type => key, key => <<"some key">>},
+    emqx_config:put([license], Config),
+    RawConfig = #{<<"type">> => key, <<"key">> => <<"some key">>},
+    emqx_config:put_raw([<<"license">>], RawConfig),
+
+    %% precondition
+    ?assertMatch(#{type := key, key := _}, emqx_conf:get([license])),
+    OldConf = emqx_conf:get_raw([]),
+
+    %% this saves updated config to `{cluster,local}-overrrides.conf'
+    {ok, _NewConf} = emqx_license:update_file(emqx_license_test_lib:default_license()),
+
+    %% assert that `{cluster,local}-overrides.conf' merge correctly
+    ?assertEqual(ok, emqx_config:init_load(emqx_license_schema, OldConf, #{})),
+
+    ok.
+
 %%------------------------------------------------------------------------------
 %% Helpers
 %%------------------------------------------------------------------------------
@@ -193,4 +486,4 @@ mk_license(Fields) ->
         EncodedLicense,
         emqx_license_test_lib:public_key_pem()
     ),
-    License.
+    {EncodedLicense, License}.
diff --git a/lib-ee/emqx_license/test/emqx_license_checker_SUITE.erl b/lib-ee/emqx_license/test/emqx_license_checker_SUITE.erl
index 8842db7f9..0e10b684d 100644
--- a/lib-ee/emqx_license/test/emqx_license_checker_SUITE.erl
+++ b/lib-ee/emqx_license/test/emqx_license_checker_SUITE.erl
@@ -35,7 +35,7 @@ end_per_testcase(_Case, _Config) ->
     ok.
 
 set_special_configs(emqx_license) ->
-    Config = #{file => emqx_license_test_lib:default_license()},
+    Config = #{type => file, file => emqx_license_test_lib:default_license()},
     emqx_config:put([license], Config);
 set_special_configs(_) ->
     ok.
diff --git a/lib-ee/emqx_license/test/emqx_license_cli_SUITE.erl b/lib-ee/emqx_license/test/emqx_license_cli_SUITE.erl
index ab7fd2dc8..5cf11adda 100644
--- a/lib-ee/emqx_license/test/emqx_license_cli_SUITE.erl
+++ b/lib-ee/emqx_license/test/emqx_license_cli_SUITE.erl
@@ -31,9 +31,9 @@ end_per_testcase(_Case, _Config) ->
     ok.
 
 set_special_configs(emqx_license) ->
-    Config = #{file => emqx_license_test_lib:default_license()},
+    Config = #{type => file, file => emqx_license_test_lib:default_license()},
     emqx_config:put([license], Config),
-    RawConfig = #{<<"file">> => emqx_license_test_lib:default_license()},
+    RawConfig = #{<<"type">> => file, <<"file">> => emqx_license_test_lib:default_license()},
     emqx_config:put_raw([<<"license">>], RawConfig);
 set_special_configs(_) ->
     ok.
diff --git a/lib-ee/emqx_license/test/emqx_license_installer_SUITE.erl b/lib-ee/emqx_license/test/emqx_license_installer_SUITE.erl
index e92c082be..e62c4d814 100644
--- a/lib-ee/emqx_license/test/emqx_license_installer_SUITE.erl
+++ b/lib-ee/emqx_license/test/emqx_license_installer_SUITE.erl
@@ -31,7 +31,7 @@ end_per_testcase(_Case, _Config) ->
     ok.
 
 set_special_configs(emqx_license) ->
-    Config = #{file => emqx_license_test_lib:default_license()},
+    Config = #{type => file, file => emqx_license_test_lib:default_license()},
     emqx_config:put([license], Config);
 set_special_configs(_) ->
     ok.
diff --git a/lib-ee/emqx_license/test/emqx_license_parser_SUITE.erl b/lib-ee/emqx_license/test/emqx_license_parser_SUITE.erl
index 3b4e78a49..e9868cdc1 100644
--- a/lib-ee/emqx_license/test/emqx_license_parser_SUITE.erl
+++ b/lib-ee/emqx_license/test/emqx_license_parser_SUITE.erl
@@ -30,7 +30,7 @@ end_per_testcase(_Case, _Config) ->
     ok.
 
 set_special_configs(emqx_license) ->
-    Config = #{file => emqx_license_test_lib:default_license()},
+    Config = #{type => file, file => emqx_license_test_lib:default_license()},
     emqx_config:put([license], Config);
 set_special_configs(_) ->
     ok.
diff --git a/lib-ee/emqx_license/test/emqx_license_parser_legacy_SUITE.erl b/lib-ee/emqx_license/test/emqx_license_parser_legacy_SUITE.erl
index b1c45ade7..61f3c4cd8 100644
--- a/lib-ee/emqx_license/test/emqx_license_parser_legacy_SUITE.erl
+++ b/lib-ee/emqx_license/test/emqx_license_parser_legacy_SUITE.erl
@@ -30,7 +30,7 @@ end_per_testcase(_Case, _Config) ->
     ok.
 
 set_special_configs(emqx_license) ->
-    Config = #{file => emqx_license_test_lib:default_license()},
+    Config = #{type => file, file => emqx_license_test_lib:default_license()},
     emqx_config:put([license], Config);
 set_special_configs(_) ->
     ok.
diff --git a/lib-ee/emqx_license/test/emqx_license_resources_SUITE.erl b/lib-ee/emqx_license/test/emqx_license_resources_SUITE.erl
index a6411902e..84a63e611 100644
--- a/lib-ee/emqx_license/test/emqx_license_resources_SUITE.erl
+++ b/lib-ee/emqx_license/test/emqx_license_resources_SUITE.erl
@@ -31,7 +31,7 @@ end_per_testcase(_Case, _Config) ->
     ok.
 
 set_special_configs(emqx_license) ->
-    Config = #{file => emqx_license_test_lib:default_license()},
+    Config = #{type => file, file => emqx_license_test_lib:default_license()},
     emqx_config:put([license], Config);
 set_special_configs(_) ->
     ok.
@@ -59,9 +59,9 @@ t_connection_count(_Config) ->
     meck:new(emqx_cm, [passthrough]),
     meck:expect(emqx_cm, get_connected_client_count, fun() -> 10 end),
 
-    meck:new(emqx_license_proto_v1, [passthrough]),
+    meck:new(emqx_license_proto_v2, [passthrough]),
     meck:expect(
-        emqx_license_proto_v1,
+        emqx_license_proto_v2,
         remote_connection_counts,
         fun(_Nodes) ->
             [{ok, 5}, {error, some_error}]
@@ -82,8 +82,8 @@ t_connection_count(_Config) ->
         end
     ),
 
-    meck:unload(emqx_license_proto_v1),
+    meck:unload(emqx_license_proto_v2),
     meck:unload(emqx_cm).
 
 t_emqx_license_proto(_Config) ->
-    ?assert("5.0.0" =< emqx_license_proto_v1:introduced_in()).
+    ?assert("5.0.0" =< emqx_license_proto_v2:introduced_in()).