Paxos inadvertently minted approximately $300 trillion worth of PYUSD, PayPal’s dollar-pegged stablecoin, on the Ethereum blockchain during an internal transfer process, producing a transient but record-setting surge in circulating supply that was confirmed by public ledger entries. The incident occurred at 3:12 PM EST on Wednesday, October 15, 2025, and was caused by a technical glitch in Paxos’ minting system that triggered an unintended token creation event, resulting in an issuance that momentarily exceeded the total U.S. dollar circulating supply. Blockchain records showed the rapid creation and the equally swift burning of the excess tokens, providing a verifiable trail of the error and its correction. Paxos identified the anomaly immediately and initiated remediation steps without delay. This rapid response exemplifies the importance of backup and preparation strategies in mitigating the effects of sudden system failures. The corrective process took approximately 22 minutes from detection to completion, during which the excess PYUSD were removed from circulation through a burn transaction, and no customer funds were affected. Paxos stated that there was no external hack or security breach, attributing the event to an internal systems failure rather than malicious interference, and reaffirmed that all customer assets remained safe throughout the episode. The company’s status as a New York Department of Financial Services–chartered entity framed the response within a regulated context, and internal controls were described as being reviewed in the aftermath. Public transparency on Ethereum enabled outside observers to confirm the timeline and sequence of events, which analysts used to trace the incident. Market implications were limited in duration, as the transient supply spike did not alter PYUSD’s peg or its backing, and market participants saw no lasting instability, although the token’s market capitalization at the time stood near $2.64 billion, making it the seventh-largest stablecoin. The episode highlighted technological risks in digital asset operations, demonstrating that even regulated issuers can encounter operational failures with material-seeming but ultimately non-collateralized impacts. Observers and regulators are likely to scrutinize internal controls and system safeguards, and the event will serve as a case study in the need for robust processes, clear governance, and the value of blockchain transparency in incident response. Paxos has previously been involved in high-profile stablecoin incidents, including mistakenly minting and burning assets, raising questions about operational risk. A public statement also confirmed no customer losses occurred during the incident.
