PayPal Stablecoin Glitch: CEO Says Blockchain Transparency, Not System Failure
Charles Cascarilla, the CEO of Paxos, spoke on Wednesday about the company’s unintentional minting of $300 trillion worth of PayPal’s stablecoin last week. Instead of portraying the situation as a system failure, he tried to portray it as proof of blockchain transparency.
He explained to a Federal Reserve crypto roundtable that the company created the tokens on Ethereum due to a human security flaw. After that, the tokens were dispatched right away to an unreachable address. Regulators are debating whether to give Paxos a federal banking license when they make the mistake, which is more than double the value of the world’s GDP.
It underscores the value of the blockchain. It actually shows the transparency that you can immediately have into what’s going on. The mistake was entirely ours. Certainly, we didn’t operate at the standards that we expect of ourselves,
Cascarilla
$300 Trillion Glitch Underlines the Value of On-Chain Transparency
In reaction to the Paxos CEO’s statement, Bitcoin.com CEO Corbin Fraser joked on X, “A long way to say we forgot to use the Eth to gwei calculator.” On the other hand, according to Republic Technologies CEO Daniel Liu, blockchain networks’ transparency is unquestionably one of their advantages.
When incidents like this occur on-chain, it’s easy for both people and machines to identify them and immediately alert the relevant parties to take action. This is far better than waiting for a company to handle such issues privately and disclose them to the public only after the fact.
Liu
The company is presently applying to the Office of the Comptroller of the Currency for a national trust charter. This comes after stablecoin companies Circle and Ripple have launched similar national bank charter applications. The reason you get run on banks is because you don’t know what you don’t know, Liu said, adding that this degree of visibility might avert future financial crises.
Fat-Finger Incidents Highlight the Need for Robust Crypto Security Measures
According to Liu, conventional finance also has such fat-finger incidents. He went on to say that the business should be able to bounce back fast because there were no actual losses. He recognized that more work had to be done. He described the incident as a warning that, similar to traditional finance, cryptocurrency needs strong security measures to control and handle problems.
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