Paxos Accidentally Issued $300 Trillion in PYUSD – Twice the World's GDP

Company Paxos, partner PayPal on the development of stablecoins PYUSD, accidentally created digital tokens worth $300 trillion — more than in twice the global GDP, which is estimated to be worth approximately $111 trillion in 2024. The error was spotted by users on Etherscan, and the company itself quickly responded, stating that the failure occurred as a result of internal technical error, and is not associated with a data leak or attack.

According to a statement from Paxos, the incident occurred at 15:12 PM ET during an internal transaction. Excess tokens were burned (cancelled) within 20 minutes after its creation. The company emphasized that clients' funds are safe, So what the cause of the failure has been eliminatedDespite the scale of the error, Paxos retained its status reliable issuer, and PYUSD still remains the sixth largest stablecoin The world.

The error has sparked a flurry of discussion, especially in light of Paxos' announcement that PYUSD is fully backed. US dollar deposits, Treasury bonds and similar assetsHowever, in the case of a $300 trillion issue, the actual backing would be impossibleThis called into question mechanism for linking emissions to reserves, which has prompted some market participants to propose the introduction transparent proof-of-reserves system for similar assets.

While Paxos quickly fixed the error, the incident highlights how algorithmic and automated processes in the blockchain are vulnerableAnd although cryptocurrencies are positioned as reliable and transparent assets, even leading players can have technical miscalculations, which, if distorted, can create enormous distortions in the economic model.