On October 15, the infrastructure provider for stablecoins, Paxos, inadvertently minted 300 trillion PYUSD for PayPal.
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.
This was an internal technical error. There is no security breach. Customer funds are safe. We have addressed the root…
— Paxos (@Paxos) October 15, 2025
The company clarified that the issue was due to an internal technical error, not a hack. The problem was resolved within 30 minutes, with the firm burning all the coins and minting 300 million PYUSD.
The incident caused temporary disruptions in the operation of DeFi protocols. As a precautionary measure, Aave suspended operations with PayPal’s “stablecoin.”
PYUSD is operational and fully backed at a 1:1 ratio.
Earlier today, 300 trillion was minted and subsequently burned.
We’ve temporarily frozen PYUSD markets on @aave as we investigate the issue.
Funds are safe! pic.twitter.com/2x0QyvrJ7d
— Omer Goldberg (@omeragoldberg) October 15, 2025
As a result, the PYUSD briefly lost its peg to the US dollar but quickly recovered after the error was corrected.
The volume was several times higher than the current US national debt ($37 trillion) and global GDP ($117 trillion), and comparable to the total global debt.
Paxos just minted $300 trillion $PYUSD on Ethereum.
This is equivalent to the entire global debt. pic.twitter.com/CEpQG2df0m
— Ted (@TedPillows) October 15, 2025
Users were alarmed that a “backed asset can be issued without actual backing.”
“But an even more troubling aspect is this: if the issuer can so easily create tokens ‘out of thin air,’ what prevents them from arbitrarily destroying any coins in the system—even legitimate ones? By purchasing PYUSD, we are forced to blindly trust the company not to burn our tokens—neither by mistake nor intentionally,” added one user.
Stablecoin Errors
Similar errors have occurred in the past. In 2019, the company behind USDT, Tether, accidentally issued 5 billion coins on the TRON blockchain and immediately destroyed them. The issuer was supposed to mint 50 million tokens for the Bitcoin exchange Poloniex instead.
In May 2021, crypto lender BlockFi mistakenly credited large amounts in Bitcoin to clients’ accounts and demanded the return of the cryptocurrency. The issue was related to a promotion that involved payouts in GUSD stablecoins.
In December 2022, during a transaction on the decentralized exchange DeversiFi for 100,000 USDT on the Ethereum network, the gas fee amounted to $23.7 million. This was a mistake—the miner later fully refunded the funds.
In September this year, Paxos introduced a proposal to launch USDH, the first “stablecoin” in the Hyperliquid lineup. However, the competition was won by the issuer Native Markets.