Paxos Accidentally Created 300 Trillion PYUSD
Date: 2025-10-17 Author: Oliver Abernathy Categories: BUSINESS
On October 15, Paxos, a stablecoin infrastructure provider, mistakenly minted 300 trillion PYUSD intended for PayPal. Company representatives clarified that this was not a cyberattack. The issue was resolved within half an hour: the excess coins were burned, and only 300 million PYUSD were officially issued.
The error led to short-term disruptions in some DeFi protocols. In particular, the Aave platform temporarily suspended PYUSD transactions to prevent potential problems. For a while, the coin's price lost its peg to the US dollar, but soon returned to normal.
The volume of accidentally minted coins significantly exceeded the US government debt ($37 trillion) and global GDP ($117 trillion), comparable to global debt. This raised concerns among users, as the "collateralized asset" appeared capable of being issued without any real backing.
One user noted that the potential for arbitrary coin creation and destruction calls into question the company's credibility: PYUSD buyers are essentially relying on the issuer's integrity, with no guarantee of the safety of their tokens.
Similar errors have occurred before. In 2019, Tether accidentally minted 5 billion USDT tokens on the TRON blockchain instead of the required 50 million for Poloniex, after which the coins were destroyed. In May 2021, BlockFi mistakenly credited customers with large amounts of Bitcoin instead of GUSD as part of a promotion. In December 2022, a 100,000 USDT transaction on DeversiFi triggered an excessively high gas fee ($23.7 million), which was refunded by the miner after the error was discovered.
Earlier, in September 2025, Paxos unveiled a plan to issue USDH, the first stablecoin in the Hyperliquid portfolio, but the competition was won by issuer Native Markets.
The PYUSD incident once again highlighted that even the largest stablecoin providers can experience critical failures that temporarily destabilize the market and require prompt intervention. Users and investors are now paying particular attention to the security and reliability of digital asset issuers.
