Paxos’ $300 Trillion Error: Stablecoin Miscalculation Sparks Market Scrutiny

The New York Department of Financial Services (NYDFS) confirmed a significant blunder by Paxos, its stablecoin issuer, which created an estimated $300 trillion in unbacked PayPal USD (PYUSD) stablecoins during a routine transfer operation on October 15th. This unprecedented error surpasses the prior record held by Citigroup’s $81 trillion accounting lapse, raising concerns about operational controls within regulated stablecoin operations. The incident temporarily inflated PYUSD’s supply before being corrected within an hour, highlighting the scale of potential consequences in a digital currency system reliant on accuracy.