tl;dr
Paxos accidentally minted $300 trillion in stablecoins due to a manual error, but CEO Charles Cascarilla called the incident a testament to blockchain's transparency, as the issue was detected instantly and no funds were lost.
**Paxos Accidentally Mints $300 Trillion in Stablecoin, Cites Blockchain Transparency as "Strength"**
In a striking example of blockchain’s transparency, Paxos CEO Charles Cascarilla defended the company’s accidental creation of $300 trillion worth of PayPal’s stablecoin last week as a testament to the technology’s accountability, rather than a systemic failure. The error, which occurred when tokens were minted on Ethereum and sent to an inaccessible address, has drawn attention as regulators weigh whether to grant Paxos a federal banking charter.
Cascarilla addressed the incident during a Federal Reserve crypto roundtable, attributing the mistake to a manual security lapse. “The mistake was entirely ours. Certainly, we didn’t operate at the standards that we expect of ourselves,” he admitted, explaining that the company’s manual processes—designed for secure cold minting—were rarely used and “put into place for a deliberate reason.” However, the error, which exceeded twice the value of global GDP, underscored the immediate visibility blockchain provides.
“It underscores the value of the blockchain. It actually shows the transparency that you can immediately have into what’s going on,” Cascarilla said, emphasizing that Paxos detected the issue within minutes and confirmed the tokens never left its internal systems.
The incident sparked mixed reactions. Bitcoin.com CEO Corbin Fraser humorously remarked on X: “A long way to say we forgot to use the Eth to gwei calculator,” poking fun at the technical oversight. Meanwhile, Daniel Liu, CEO of Republic Technologies, highlighted the broader benefits of blockchain transparency. “When incidents like this occur on-chain, it’s easy for both people and machines to identify them and immediately alert the relevant parties,” Liu told *Decrypt*. He contrasted this with traditional finance, where issues might remain hidden until disclosed publicly.
Liu also noted that such “fat finger” errors are not unique to crypto, citing similar mishaps in traditional finance. “Given that there were no real losses, they should be able to recover from this quickly,” he added, though he acknowledged the need for stronger safeguards in the industry.
Paxos, which is seeking a national trust charter from the Office of the Comptroller of the Currency, joins firms like Circle and Ripple in pursuing federal banking licenses. The incident comes amid growing regulatory scrutiny of stablecoins, following the passage of the GENIUS Act—a landmark law providing federal recognition and oversight for dollar-backed digital assets.
While the error may cause only short-term reputational damage, experts agree that blockchain’s transparency could prevent future crises by enabling swift detection and response. As Liu noted, “You get run on banks because you don’t know what you don’t know.” For Paxos, the episode serves as a reminder that even in crypto, robust safeguards remain essential.