In a dramatic misstep that sent shockwaves through the crypto world, Paxos, the issuer behind PayPal’s PYUSD stablecoin, accidentally minted $300 trillion worth of PYUSD tokens on the Ethereum blockchain before burning the entire amount within minutes.
According to on-chain data, the over-minting occurred during an internal transfer, a likely “fat finger” error involving extra zeros. The incident briefly made PYUSD the world’s largest stablecoin by supply.
Within about 22 minutes, Paxos reversed the mistake, burning all excess tokens by sending them to an inaccessible address. Paxos described the event as an internal technical error, emphasizing that no security breach occurred and that customer funds remained safe.
The firm also stated it has addressed the root cause to avoid recurrence. Despite the massive scale of the error, PYUSD’s dollar peg held relatively steady. The price reportedly dipped only about 0.5% before stabilising.
Some decentralized finance platforms reacted cautiously: for example, Aave temporarily froze PYUSD trading amid the confusion. Regulators have taken note. The New York Department of Financial Services (NYDFS) confirmed it is in contact with Paxos and PayPal regarding the incident.
The mishap has reignited debate over stablecoin safeguards, particularly around proof-of-reserves, automated issuance limits, and operational risk controls. As one industry observer put it, “minting $300 trillion is a preventable mistake.”
This episode highlights the stark reality of how deeply the stablecoin sector relies on sound controls and transparency.
While the damage was contained, it underscores that even highly regulated issuers are vulnerable to human or technical errors, and that public trust may hinge on how such mistakes are handled.