$300 trillion stablecoin incident

Paxos, the blockchain partner of online payment giant PayPal, accidentally minted a huge amount of stablecoins worth $300 trillion on October 15 due to a technical error.

Photo: cryptoslate.com

Market watchers have spotted an unusual injection of the PayPal PYUSD stablecoin on Etherscan, a Blockchain tracker dedicated to the Ethereum ecosystem.

In a statement on social media, Paxos said it had mistakenly minted the stablecoin in an internal transaction, but was immediately caught and fixed by burning the excess PYUSD. Paxos insisted this was an internal technical error and that there was no security breach. The company stressed that customer funds were safe as Paxos addressed the root cause of the problem.

PYUSD is advertised as a stablecoin pegged 1:1 to the US dollar, fully backed by USD deposits, US Treasury bonds and cash equivalents. Therefore, PayPal promises that the token can always be redeemed for US dollars at a 1:1 ratio.

However, this technical error has highlighted the fact that the USD peg needs to be guaranteed by PayPal itself and requires independent third-party verification reports, rather than being intrinsically linked to the stablecoin minting process.

Theoretically, 300,000 billion PYUSD is equivalent to the amount of USD in circulation, which is twice the estimated Gross Domestic Product (GDP) of the entire world .

Paxos's failure comes at a time when stablecoins are becoming increasingly popular with more banks and payment platforms accepting them. PYUSD is now the world's sixth-largest stablecoin, with a market capitalization of more than $2.6 billion, according to data from CoinMarketCap.

Source: https://baotintuc.vn/thi-truong-tien-te/su-coduc-nham-300000-ty-usd-stablecoin-20251017122149016.htm