Paxos employees inadvertently issued $300 trillion worth of dollar-pegged PayPal USD (PYUSD) stablecoins, more than three times the money supply of the four largest economies.
On October 15, the company’s employees created 300 trillion PYUSD on the Ethereum blockchain, whose actual market capitalization is estimated at only $2,64 billion. Upon learning of their error, they destroyed the coins 22 minutes later, so the oversight did not cause a drop in the cryptocurrency’s price.
Information on the release of 300 trillion PYUSD
Paxos specialists miscalculated and issued too many PYUSD during an internal transfer. This was due to a technical error. The security system was not hacked. Client funds are safe. We have corrected the cause of the oversight, Paxos representatives commented.
However, credit workers DeFi Aave took the stablecoin issuance very seriously. They temporarily froze PayPal USD transactions and launched an investigation, stating that customers’ savings were not at risk.
Former Google senior engineer Rui Diao praised Paxos employees for the prompt token burn, but he is concerned about the very possibility of creating such a huge number of stablecoins, apparently backed by nothing. This could undermine trust in the cryptocurrency issuer and call into question the reliability of PYUSD.