In October 2025, a dramatic operational error at Paxos, the issuer of the PayPal USD (PYUSD) stablecoin, sent shockwaves through the cryptocurrency industry. The company accidentally minted an astonishing $300 trillion worth of PYUSD due to a typo in an internal transfer, a figure that is more than twice the entire global GDP.
The incident began as a routine $300 million transfer between Paxos-controlled wallets. A mistake during the process resulted in the company minting $300 trillion in PYUSD, which was briefly visible on public blockchain explorers like Etherscan. Paxos identified the error within minutes and moved to resolve it. Leveraging the centralized control inherent to its stablecoin model, the company transferred the erroneously created tokens to a burn address with an unknown private key, permanently removing them from circulation. The intended $300 million transfer was then executed correctly.
A Symptom of Systemic Vulnerabilities
While quickly corrected and with no reported impact on customer funds, the event exposed profound operational and systemic risks. The underlying cause was a critical lack of technical safeguards. The supply of PYUSD was managed by a single externally owned account (EOA) with unlimited mint privileges, without multi-signature requirements or automated controls that could have prevented such an extreme error.
This “fat-finger” incident has triggered fresh scrutiny from regulators, including the New York Department of Financial Services (NYDFS), and ignited a industry-wide debate on the need for mandatory, real-time proof-of-reserve checks and more robust governance for stablecoin issuers. For a company that has historically emphasized its commitment to compliance, this error, coupled with a recent $26.5 million NYDFS penalty for past anti-money laundering failures, poses a challenge to its reputation for reliability.
The Path Forward for Stablecoins
The $300 trillion typo serves as a stark reminder that human error remains a significant threat, even in regulated and technologically advanced financial systems. It underscores that the greatest risk may not always be external hackers, but the operators themselves.
The path forward for stablecoins lies in adopting stronger, multi-layered risk management frameworks. This includes implementing technical guardrails like multi-signature wallets, integrating real-time auditing systems to flag anomalous transactions, and fostering proactive collaboration with regulators to build more resilient and trustworthy digital assets.
