They issued the stable coin called PYUSD (PayPal USD) in partnership with PayPal.
Their role: minting and burning the stable coin, ensuring that PYUSD is backed 1:1 by U.S. dollars and equivalent reserves (as claimed).
The error: “$300 trillion” minting
On October 15 2025, Paxos mistakenly minted about $300 trillion worth of PYUSD tokens during an internal transfer
Paxos says it was an internal “technical error” (not a hack), and that it immediately identified the issue and “burned” the excess tokens within 20 minutes.
Despite the scale of the error (far exceeding actual backing or the world’s GDP), Paxos asserts that customer funds were safe.
Why this matters
The incident raises concern about operational controls in stable coin issuance: how could such a huge minting occur if the system is meant to tightly control issuance.Stable coin backing: PYUSD is claimed to be backed by U.S. dollar deposits, Treasuries, etc. But the “$300 trillion” minted obviously couldn’t be backed. This discrepancy draws attention. Trust & regulation: For PayPal and Paxos, this is a reputational blow and may attract regulatory scrutiny.
Disclaimer
This article is for educational and informational purposes only. It does not constitute financial or investment advice. Cryptocurrency investments are subject to market risks. Always do your own research (DYOR) and consult a certified financial advisor before investing.
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