Crypto industry observers were left scratching their heads on Wednesday afternoon when a transaction revealed that Paxos, the issuer of the PayPal-branded PYUSD stablecoin, had minted a staggering $300 trillion worth of tokens on the Ethereum blockchain. Surprisingly, just over 20 minutes later, all 300 trillion PYUSD tokens were “burned,” effectively rendering them unusable by sending them to an inaccessible network address.
To put the scale of this event into perspective, $300 trillion is more than 2.5 times the entire world’s GDP, estimated at around $117 trillion by the International Monetary Fund. Additionally, there are only approximately $2.4 trillion in physical U.S. dollars currently in circulation, according to TradingEconomics. The transaction to mint this enormous sum cost a mere $2.66 in fees.
What transpired was later clarified by Paxos, which attributed the minting incident to a “fat finger” mistake. “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,” the official Paxos account explained on social media hours after the mishap. “This was an internal technical error. There is no security breach. Customer funds are safe. We have addressed the root cause.”
Prior to the erroneous minting, Paxos had completed two other PYUSD transactions within the same timeframe, both amounting to 300 million PYUSD, leading most observers to conclude that the minting was likely a mistake rather than a deliberate act of manipulation.
Despite the misstep, PayPal, which partners with Paxos for the stablecoin, has yet to publicly comment. Representatives from Paxos directed inquiries to their earlier social media post. This incident comes as Paxos is in the process of seeking a national trust charter with the Office of the Comptroller of the Currency (OCC) under the recently passed GENIUS Act, which would permit it to conduct business legally across the United States.
Amanda Fischer, Policy Director at Better Markets and former Chief of Staff to ex-SEC Chair Gary Gensler, raised alarms about the implications of the incident. She commented, “If someone with a fat finger error can increase the total supply of a stablecoin by a factor of 120,000, then perhaps regulators should proceed cautiously with granting that firm a national bank charter and keys to the payment system.”
As word spread, the crypto community reacted swiftly on social media, mixing humor with incredulity. Some users quipped that the stablecoins could be used to pay off the U.S. national debt, which stands at $37.8 trillion, while others referenced the “trillions” meme associated with the Plasma stablecoin network. Notable commentary included, “Trillions achieved incorrectly,” from a Plasma growth lead and “This isn’t the trillions I wanted,” from the founder of the crypto game Treeverse.
Amid the laughter, there were also expressions of concern over the implications of such a large-scale error from one of the foremost stablecoin issuers. Martin Köppelmann, founder and CEO of crypto wallet Gnosis, remarked on social media, “Certainly not a good look to get the decimals wrong when minting stables and not having procedures in place to catch that early.”
As the dust settles from this incident, it serves as a stark reminder of the potential volatility and risks associated with the rapidly evolving crypto landscape.
