Paxos accidentally minted $300 trillion worth of the PayPal USD (PYUSD) stablecoin due to an internal technical error on October 15. The blockchain’s transparency allowed for the swift identification and correction of this mistake, which was addressed just 22 minutes later.

According to Kate Cooper, CEO of OKX Australia, blockchain provides a level of visibility that traditional banking lacks. She stated, “Mistakes happen in every financial system — the difference with blockchain is that they’re visible, traceable, and quickly correctable. This transparency is a strength, not a flaw.”

On the other hand, Ryne Saxe, CEO of Eco, emphasized that the blockchain’s transparency fosters accountability that is not typically found within traditional finance, adding, “This level of transparency, and real time coordination, is unheard of in today’s central banking economy.”

Mistakes are not uncommon in the banking sector. For instance, Citigroup once inadvertently credited a client’s account with $81 trillion instead of $281, only to take hours to rectify it, and another time almost transferred $6 billion due to a clerical mistake.

The Paxos incident underscores the need for stablecoin companies to enhance their operational controls and risk management strategies, as emphasized by Shahar Madar of Fireblocks. He urged that minting large sums like $300 trillion is preventable and advised ensuring security measures during the token issuance lifecycle.