PayPal’s blockchain partner, Paxos, appears to have made a significant maths-related blunder earlier this week by mistakenly minting $300 trillion worth of its stablecoin, PYUSD.
That figure is staggering on its own, but it’s even more remarkable when you consider that it’s more than double the world’s GDP, which is currently estimated to be around $111 trillion based on 2024 figures.
The company addressed the issue with a statement on X, confirming the erroneous minting of coins and describing it as an internal technical error. “There is no security breach,” the post assured. “Customer funds are safe. We have addressed the root cause.”
What exactly caused the error remains unclear. I like to imagine it might have been something as simple as someone dropping a sandwich on their keyboard—because that’s often how my mistakes happen. However, a commenter in the thread speculated that it could have been due to forgetting to account for six decimal places, which is a classic maths slip. Alternatively, it might have been a “fat-finger” error, both figuratively and literally.
What’s perhaps more intriguing is the fact that PYUSD is advertised as a dollar-pegged stablecoin, said to be “fully backed by US dollar deposits, US treasuries, and similar cash equivalents.”
In the case of $300 trillion worth of coins, such backing would be literally impossible. This incident shows that the generation of new coins does not appear to be directly tied to the reserves mentioned, at least under the current system. This has led some experts to suggest that a proof-of-reserve mechanism should be mandatory for stablecoin issuance to maintain trust and transparency.
Money has always been somewhat abstract, but cryptocurrencies feel even more so. Fortunately, in this case, the mistake was quickly corrected—the excess coins were “burned” and thus removed from circulation. PYUSD has maintained its position as the sixth-largest stablecoin in the world.
All’s well that ends well, I suppose. Still, I imagine whoever made this error is having a particularly rough week. My sympathies—these things happen to the best of us!
https://www.pcgamer.com/hardware/paypals-crypto-partner-accidentally-minted-usd300-000-000-000-000-worth-of-stablecoins-which-is-more-than-twice-the-worlds-total-gdp/
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