Blockchain infrastructure company Paxos, which issues PayPal’s USD stablecoin (PYUSD), accidentally minted an astonishing $300 trillion worth of digital tokens on Wednesday, describing the incident as a “technical error” and assuring users that no funds were at risk.
The anomaly, spotted on Etherscan, an Ethereum blockchain tracking platform, showed a massive issuance of PYUSD tokens before Paxos intervened to correct the mistake. Within 20 minutes, the company burned the excess tokens, restoring normal balances.
“This was an internal technical error. There is no security breach. Customer funds are safe. We have addressed the root cause,” Paxos said in a social media statement.
PayPal did not immediately respond to media requests for comment.
What Happened
The glitch occurred during what Paxos described as an internal transfer, temporarily inflating the total PYUSD supply to levels exceeding the combined economic output of the global economy.
Observers on crypto forums quickly noted the error, sparking short-lived speculation before Paxos confirmed the issue was contained. Blockchain records later showed the minted tokens had been removed, confirming no impact on users or market operations.
While the event had no financial consequences, analysts say it serves as a reminder that technical systems underpinning stablecoins remain vulnerable to operational mistakes.
“Even a routine internal process can create large visible anomalies in a fully transparent system like Ethereum,” said Rico Luman, senior sector economist at ING. “It underlines both the strengths and weaknesses of blockchain transparency.”
Stablecoin Context
PYUSD, launched by PayPal in 2023, is a U.S. dollar-pegged stablecoin backed by cash and short-term treasuries. It’s designed to allow PayPal users to transact in digital dollars while maintaining 1:1 redemption parity with U.S. currency.
The error does not affect this backing, as token issuance and reserve assets are managed and verified separately through third-party attestations.
As of Thursday, PYUSD remains the world’s sixth-largest stablecoin, with a market capitalization above $2.6 billion, according to CoinMarketCap.
Stablecoins have gained traction among payment companies and financial institutions as they bridge traditional banking and blockchain technology, though regulators continue to push for stronger transparency and risk management standards.
Broader Implications
While Paxos’ swift response prevented broader disruption, analysts note the incident highlights the importance of robust auditing, system checks, and regulatory oversight in the growing digital assets market.
“This was not a security event, but it’s an important test of accountability,” said Michael Rinehart, a fintech governance specialist. “Mistakes of this scale — even internal — show why public trust depends on transparency and fast corrective action.”
Paxos, which operates under the oversight of the New York Department of Financial Services (NYDFS), said it has implemented measures to prevent similar incidents.
