Paxos accidentally mints $300 trillion in PayPal stablecoin

Paxos acknowledged today that it accidentally minted $300 trillion worth of the dollar pegged PayPal’s PYUSD stablecoin on the Ethereum blockchain. The amount represents more than twice the global GDP and more than 125 times the number of U.S. dollars in circulation. 

Based on blockchain data, the unprecedented mint occurred at 3:12 PM EST on Wednesday when Paxos created tokens as part of what it described as an internal error. The firm confirmed no security breach and assured the community that customer funds were safe. On-chain analytics dashboards and crypto users detected the successive mint and burn sequence, sparking confusion and questions on the integrity of dollar-pegged stablecoins. 

Accidental mint sparks questions on the integrity of dollar-pegged stablecoins

The magnitude of the mint briefly prompted fears across the crypto community over compromise and system malfunction before Paxos intervened with a clarification. The event even triggered immediate risk management strategy responses from several DeFi platforms. For instance, Aave, a crypto lending protocol, temporarily froze its PYUSD markets following the unexpected high magnitude transaction. 

At 3:12 PM EST, Paxos mistakenly minted excess PYUSD as part of an internal transfer. Paxos immediately identified the error and burned the excess PYUSD.

This was an internal technical error. There is no security breach. Customer funds are safe. We have addressed the root…

— Paxos (@Paxos) October 15, 2025

Online community participants have begun questioning the integrity of the dollar-pegged stablecoins, asking if stablecoins are backed 1:1 by the dollar. One notable X account showed concerns about whether the $300 trillion minted stablecoin was actually collateralized, despite being a mistake. They argue that minted tokens, even by mistake, naturally have to be backed by something; however, the magnitude of the PYUSD mint, bigger than the entire global GDP, is not logical, especially when the dollar backs the token. 

Omer Goldberg, PayPal’s head of blockchain unit, reassured users that PYUSD remains fully backed 1:1 by U.S. dollars, and the incident did not affect the circulating supply. He added that all the balances reflected accurate collateralization after the reversal. Based on on-chain records, a zero net increase in PYUSD supply was realized. Paxos emphasized that the tokens were never circulated and that all operational systems were secure.

Paxos’ blunder raises red flags for GENIUS Act charter bid

The event struck the crypto community with immediate disbelief and satire. Some joked that Paxos had printed enough stablecoins to pay off the U.S. national debt, while others referenced crypto memes about ‘fat-finger’ trades, a term used to describe costly keystroke errors. The humor around the incident gave away deep concerns over decentralized controls. VBL’s Ghost, a market analyst, noted that one should be worried if someone can create $300 trillion of collateralized assets without collateral. Gnosis founder Martin Köppelmann questioned the accidental mint, suggesting further stricter automated checks in smart contract operations.

Paxos is seeking the U.S. national trust charter from the Office of the Controller of stablecoins under the GENIUS Act. The charter would allow Paxos to operate nationally as a federally chartered institution. The latest accidental mint event may welcome deep regulatory scrutiny regarding Paxos’ technical safeguards and risk control mechanisms. 

Amanda Fischer, a policy director at Better Markets, has encouraged regulators to proceed cautiously when approving stablecoin issuers for national licensing. The incident renewed the concerns that while stablecoins offer efficiency and transparency in transactional reporting, the centralized nature of the issuance has remained blurred and vulnerable to human or software error. 

The mint cost Paxos roughly $2.66 in Ethereum gas fees, building on an earlier incident of the exact nature in which Tether accidentally minted $5 billion USDT in 2019 and corrected it within minutes. A whale X account dedicated to reporting large transactions on the chain surfaced the event, noting that 50 million USDT tokens had been transferred from Poloniex exchange to Tether Treasury via the Omni protocol on the Bitcoin blockchain.

PYUSD, with a market cap of $2.65 billion, has realized a mere slip of 0.03% today. Total volume over the past 24 hours has surged to over 70% showing a heightened volatility for the token.

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