Paxos explained the $300 trillion PYUSD mint error
At a Federal Reserve roundtable, a Paxos representative publicly addressed the incident involving the minting of $300 trillion PayPal USD (PYUSD) – the biggest technical error ever recorded in the stablecoin market.
According to the speaker, the mistake happened during a rare manual cold-minting process intended to enhance the security of token creation. “The mistake was entirely ours. Certainly, we didn’t operate at the standards that we expect of ourselves,” the Paxos representative said, noting that the issue was identified within minutes and none of the excess tokens ever left the company’s system.
He emphasized that the case illustrates the transparency of blockchain technology: “It actually illustrates the real-time visibility blockchain provides into operational processes. And so in this case, an operational error that was entirely internal to our systems is now immediately visible to everybody.”
Paxos stated that while such incidents are painful, they highlight the benefits of open financial infrastructure, where every error is recorded in real time.
On October 15, Paxos mistakenly minted and then burned $300 trillion PYUSD within 30 minutes. The error stemmed from a technical malfunction during an internal transfer and did not affect user funds. During the review, the Aave protocol temporarily froze the PYUSD market, and the stablecoin briefly deviated from $1 before returning to parity.
The company confirmed it has strengthened its internal controls and will implement additional safeguards to prevent similar errors in the future.
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