Paxos reported earlier this week that it mistakenly minted excess PYUSD as part of an internal transfer. Paxos confirmed that it immediately identified the error and burned the excess PYUSD. According to the company, this was simply an “internal technical error” and that there was no security breach. Customer funds are “safe” and they claim to have addressed the root cause of the issue.
At 3:12 PM EST, Paxos mistakenly minted excess PYUSD as part of an internal transfer. Paxos immediately identified the error and burned the excess PYUSD.
This was an internal technical error. There is no security breach. Customer funds are safe. We have addressed the root…
— Paxos (@Paxos) October 15, 2025
The additional coins were sent to a burn address and are now permanently out of circulation. However, people on social media were quick to react to the issue, and argued that if it is so easy to mint so many coins, then it could lead to potentially serious issues and these coins might not be so stable after all. But these concerns are exaggerated and based on a fundamental misunderstanding of how stablecoins are issued and regulated.
Before getting into why this was not such a major issue, it should be noted that Bitcoin is often regarded as an unbreakable, decentralized crypto network. But 15 years ago, a bug in Bitcoin’s source-code temporarily shattered its scarcity principle, minting 184.4 billion BTC—almost 9,000 times the 21 million supply cap. However, this issue was quickly addressed.
Even the Federal Reserve keeps track of currency in circulation with a set of database entries on computers. And even if Paxos did mint trillions of coins, it can be verified that those coins were not backed by real USD or other assets because blockchain-based ledgers and record-keeping make it easier to track such information.
Moreover, there have been cases even within the traditional banking system where people’s accounts were credited with quadrillions of dollars and then those errors were promptly addressed. As widely reported, Paxos printing $300 trillion worth of stablecoins was considered quite problematic by many industry observers. But the truth is that these glitches happen from time to time and there is an easy fix because the system can be rolled back or the extra coins can simply be burned by sending them to a burn address.
