In a moment that sent shockwaves—and not a little confusion—through the cryptocurrency world, Paxos, PayPal’s blockchain partner and the issuer of the PYUSD stablecoin, accidentally minted a staggering $300 trillion worth of digital dollars on October 15, 2025. The blunder, which unfolded in the span of mere minutes, was quickly reversed as the excess tokens were burned, but not before eagle-eyed blockchain watchers spotted the anomaly on Etherscan, the Ethereum blockchain’s public ledger and analytics platform.
According to statements released by Paxos on social media, the incident was the result of “an internal technical error.” The company emphasized that there was no security breach and that “customer funds are safe.” As reported by CNBC and confirmed by blockchain records, the mistakenly created tokens were destroyed within about 20 minutes of their creation. “Paxos immediately identified the error and burned the excess PYUSD,” the company explained, adding, “We have addressed the root cause.”
The sheer scale of the error is mind-boggling. The $300 trillion in mistakenly minted PYUSD is more than double the world’s total gross domestic product in 2024, as measured by the World Bank Group. To put it in perspective, CNBC noted that there aren’t even enough U.S. dollars in circulation to back such a sum, highlighting the theoretical impossibility of redeeming that amount with real-world assets.
PYUSD, which is pegged 1:1 to the U.S. dollar, is backed by U.S. dollar deposits, U.S. Treasuries, and other cash equivalents. Paxos, which operates under a charter from the New York Department of Financial Services (NYDFS), claims that the total redemption assets always equal or exceed the total outstanding PYUSD tokens. As of August 29, 2025, accounting firm KPMG attested to a small surplus: Paxos held $1.173 million in total redemption assets against 1.169 million PYUSD redeemable tokens.
Despite the company’s rapid response, the incident has cast a spotlight on the operational risks that even regulated digital asset firms face. As reported by Bloomberg and other outlets, the event demonstrates that, while blockchain technology offers a level of transparency not seen in traditional finance, it is not immune to human or technical error. The public nature of blockchains like Ethereum means that any mistake is immediately visible to anyone watching, for better or worse.
Omid Malekan, an associate at Columbia University’s business school, offered a key insight: “Crypto is once again safer, even when [messing] up,” he said, arguing that the very transparency of public blockchains is a feature, not a bug. Malekan contrasted the incident with traditional finance, where similar errors might go unnoticed or unreported for much longer. “The only way the world found out about that error is because Citi self-reported to the feds, unlike the Paxos error that many different people spotted independently,” he said.
The error occurred during what Paxos described as an internal transfer—essentially, a movement of tokens within the company’s own accounts. While such operations are routine for stablecoin issuers, the scale of this particular mistake was unprecedented. Etherscan, the Ethereum block explorer, showed the creation and subsequent burning of the tokens, providing a transparent record of both the error and its correction.
This isn’t the first time the crypto world has witnessed such a mishap. In 2019, stablecoin giant Tether accidentally minted—and quickly burned—$5 billion in USDT. But Paxos’ incident dwarfs previous errors by several orders of magnitude, both in scale and in the attention it attracted. The episode is expected to become a case study for regulators and financial institutions as they assess the internal controls required for centralized stablecoin issuers.
The timing of the incident is notable as well. Stablecoins like PYUSD have become increasingly mainstream, with adoption by banks, payment platforms, and even some governments. PYUSD itself has grown rapidly since its launch, becoming the sixth-largest stablecoin in the world with a market capitalization of over $2.6 billion, according to CoinMarketCap data.
Yet the Paxos error also reignites debates about the nature of stablecoins and their relationship to real-world assets. As CNBC and other outlets pointed out, the fact that $300 trillion worth of PYUSD could be minted with a few lines of code—and just as easily destroyed—underscores the hybrid nature of these digital assets. They are, as Bloomberg noted, “programmable liabilities”—money that exists on a blockchain but is ultimately governed by the issuer’s software and internal controls.
For Paxos, the incident comes on the heels of regulatory scrutiny. In August 2025, the company settled for $48.5 million in New York over anti-money laundering failures related to its partnership with Binance, another major player in the crypto space. That episode, combined with the recent minting mishap, highlights the challenges facing even the most established and regulated actors in the stablecoin market.
Still, the rapid remediation of the error may offer some reassurance to users and observers. The transparency of the blockchain allowed the entire world to witness both the mistake and its correction in real time. And, as Paxos was quick to emphasize, no customer funds were ever at risk. “There is no security breach. Customer funds are safe. We have addressed the root cause,” the company reiterated in its public statements.
Looking ahead, the incident is likely to fuel ongoing discussions among regulators, technologists, and financial institutions about the best ways to manage risk in the fast-evolving world of digital assets. It also serves as a potent reminder that, while blockchain technology offers unprecedented transparency and programmability, it is still operated by humans—and, as this week’s events showed, sometimes humans make mistakes.
In the end, the $300 trillion that briefly existed on the Ethereum blockchain is gone as quickly as it appeared, but the lessons it leaves behind are sure to linger in boardrooms, regulatory agencies, and crypto forums for a long time to come.
