On Wednesday, stablecoin issuer Paxos accidentally minted $300 trillion worth of PayPal Holdings Inc.’s PYUSD stablecoin on Ethereum – a “fat finger” error on the blockchain that far exceeded the total U.S. dollar circulating supply of $2.4 trillion.
“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,” Paxos announced on X.
The issuer explained that a technical glitch caused the PYUSD supply to rapidly and unintentionally expand, which was quickly identified and resolved. Paxos emphasized that it was not a security breach and assured that all customer funds remain safe.
Still, the fact that a technical issue led to such an enormous amount of stablecoin creation without the requisite collateral has raised eyebrows.
“It’s not the dollar amount you should be thinking about. It’s the fact that this is a collateralized asset that can be created without the collateral,” a popular pseudonymous market commentator, VBL’s Ghost, said.
At the time of writing, PYUSD ranked as the world’s seventh-largest stablecoin, with a market value of $2.64 billion. Each token is fully backed by highly liquid, high-quality reserve assets to maintain its 1:1 peg with the U.S. dollar.
Fat-finger errors have happened before in the crypto market. In 2019, Tether, the issuer of the world’s largest dollar-pegged stablecoin USDT, mistakenly minted and quickly destroyed $5 billion in USDT.
On Wednesday, stablecoin issuer Paxos accidentally minted $300 trillion worth of PayPal Holdings Inc.’s PYUSD stablecoin on Ethereum – a “fat finger” error on the blockchain that far exceeded the total U.S. dollar circulating supply of $2.4 trillion.
“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,” Paxos announced on X.
The issuer explained that a technical glitch caused the PYUSD supply to rapidly and unintentionally expand, which was quickly identified and resolved. Paxos emphasized that it was not a security breach and assured that all customer funds remain safe.
Still, the fact that a technical issue led to such an enormous amount of stablecoin creation without the requisite collateral has raised eyebrows.
“It’s not the dollar amount you should be thinking about. It’s the fact that this is a collateralized asset that can be created without the collateral,” a popular pseudonymous market commentator, VBL’s Ghost, said.
At the time of writing, PYUSD ranked as the world’s seventh-largest stablecoin, with a market value of $2.64 billion. Each token is fully backed by highly liquid, high-quality reserve assets to maintain its 1:1 peg with the U.S. dollar.
Fat-finger errors have happened before in the crypto market. In 2019, Tether, the issuer of the world’s largest dollar-pegged stablecoin USDT, mistakenly minted and quickly destroyed $5 billion in USDT.
