In what’s being described as a colossal error, cryptocurrency firm Paxos mistakenly minted $300 trillion U.S. worth of a stablecoin.
Making matters worse, it was the stablecoin of Paxos’ blockchain partner PayPal (PYPL), the online payments giant.
In a statement, Paxos called the minting of $300 trillion U.S. worth of PayPal’s PYUSD stablecoin a “technical error.”
Paxos goes on to state that it “immediately identified the error and burned the excess PYUSD,” meaning that it has disposed of the excess supply.
“This was an internal technical error. There is no security breach. Customer funds are safe,” said Paxos in a written statement.
Stablecoins are cryptocurrencies whose value is pegged to another asset, typically the U.S. dollar or price of gold.
PayPal has not commented publicly on the situation or the excess stablecoins that were produced. The situation has drawn significant attention and a sizable reaction online.
PayPal’s PYUSD is described as a U.S. dollar-pegged stablecoin that is fully backed by American currency deposits.
The PYUSD stablecoin is always redeemable for U.S. dollars on a 1:1 basis, claims PayPal.
However, the error by Paxos highlights the risks that remain with stablecoins and the broader cryptocurrency market.
The Paxos’ error comes at a time when stablecoins are becoming more mainstream and adopted by an increasing number of banks and payment platforms.
PYUSD is currently the sixth-largest stablecoin in the world with a market capitalization of about $2.5 billion U.S.
PayPal’s stock is down 21% this year and trading at $67.98 U.S. per share.
