WASHINGTON (dpa-AFX) - Paxos, the blockchain partner that powers PayPal's stablecoin, unintentionally created an incredible $300 trillion worth of PYUSD tokens because of what it called a 'technical error.'
Confusion swept through the cryptocurrency community when the error momentarily surfaced on Etherscan, a public Ethereum blockchain explorer.
Paxos said the massive minting happened during an internal transfer and was promptly undone after it was discovered. 'This was a technical glitch that happened internally. No security is compromised. Consumer money is secure. We've dealt with the underlying issue,' the business said in a statement.
According to blockchain records, Paxos burned the extra PYUSD tokens, fixing the error in roughly 20 minutes. PayPal, the company behind the stablecoin's launch last year, refrained from commenting on the incident right away.
The PYUSD is supported by dollar deposits, US Treasuries, and comparable cash equivalents and is intended to remain pegged at a 1:1 ratio to the US dollar.
The mistake, however, emphasizes that the stabilitycoin's value is dependent on the accuracy of PayPal and Paxos' oversight rather than an automated blockchain system.
In theory, there aren't enough dollars in circulation to support $300 trillion in PYUSD, which is more than twice the global GDP.
With a market valuation of roughly $2.6 billion, PYUSD is still the sixth-largest stablecoin in the world, despite the incident, according to CoinMarketCap.
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