In a bizarre turn of events on Wednesday, Paxos, the blockchain infrastructure firm that issues PayPal’s U.S. dollar-backed stablecoin (PYUSD), mistakenly minted $300 trillion worth of PYUSD tokens, triggering confusion across the crypto community before quickly resolving the issue.

According to blockchain data from Etherscan, the massive minting event appeared as a sudden surge in PYUSD supply, sparking alarm among crypto market watchers. The error was part of an internal transfer gone wrong, Paxos confirmed in a statement posted to social media platform X (formerly Twitter).

“This was an internal technical error. There is no security breach. Customer funds are safe. We have addressed the root cause,” the company said.

The incident lasted about 20 minutes before Paxos burned the excess tokens, effectively erasing the unintended $300 trillion worth of PYUSD from circulation.

What Happened

Etherscan data showed an unusually large minting event linked to PayPal’s stablecoin smart contract, briefly inflating PYUSD’s total supply by a number that exceeded twice the world’s GDP — an impossible scenario for a token designed to be backed 1:1 by U.S. dollar reserves and short-term treasuries.

The glitch did not affect the price or trading of PYUSD on exchanges, as the tokens never entered public circulation.

“It’s a strong reminder that while stablecoins are pegged to fiat currencies, their stability depends on the integrity of their issuers and smart contract management,” said Alex Krüger, an independent crypto analyst.

Context: Stablecoins Under Scrutiny

The incident comes as stablecoins face increasing regulatory and public scrutiny. Stablecoins such as Tether (USDT), Circle’s USDC, and now PayPal’s PYUSD are widely used for payments, trading, and DeFi applications — with global adoption accelerating.

PYUSD, launched in August 2023, has grown rapidly and now ranks as the sixth-largest stablecoin globally, boasting a market capitalization exceeding $2.6 billion, according to CoinMarketCap.

Despite the error, Paxos and PayPal reaffirmed the security and 1:1 dollar backing of PYUSD, emphasizing that no customer funds were ever at risk.

The Bigger Picture

While the “$300 trillion mint” was a simple operational mistake, it underscores the risks of programmable money systems, where human or software errors can generate enormous, albeit temporary, distortions on public ledgers.

Analysts say the event is unlikely to harm confidence in PayPal’s crypto ambitions, though it may prompt enhanced audit protocols and greater transparency in blockchain minting mechanisms going forward.

“Such incidents remind us that automation must be complemented by rigorous checks and real-time validation layers,” said Maya Zehavi, a blockchain governance expert.