Paraguay president resigns after collapse of Ueno digital bank
President steps down amid bank crisis
Paraguayan President Santiago Pena announced his resignation on Thursday. The move followed the collapse of digital lender Ueno Bank and the loss of access to deposits for millions of customers.
In a video posted on X, Pena said he wanted to protect stability, social peace and democratic institutions. He said his priority was protecting Paraguayans who had placed savings in the financial system.
The resignation came as lawmakers debated impeachment proceedings. Reports linked the debate to alleged conflicts of interest, misuse of pension funds and institutional cover-ups connected to the bank's collapse.
Key numbers behind the crisis
- Ueno Bank served more than 3 million customers in a country of about 6.5 million people.
- Its solvency ratio fell to 5.56%, below the regulatory minimum of 12%.
- A USDt listing on Bybit's Paraguay peer-to-peer market was seen at 6,942 guaranies. That was about 13% above the central bank reference rate of 6,144 guaranies per US dollar on Nov. 4.
- Deposit guarantee payments started for eligible clients with balances up to 10 million guaranies, about $1,630.
- Deposits are protected up to 228.3 million guaranies, about $37,200, per depositor per institution.
What the central bank announced
Paraguay's central bank announced resolution proceedings for Ueno Bank on Tuesday. Resolution is the process authorities use when a bank cannot continue operating normally.
The bank said it received regulatory notices on June 5 and July 24. The notices required adjustments to loans to related parties. The bank said the notices concerned companies linked to its controlling shareholder, Grupo Vazquez.
On Nov. 2, the central bank started resolution proceedings. It said adjustments to the bank's financial statements pushed its solvency ratio down to 5.56%. A solvency ratio is a measure of a bank's financial strength. Authorities suspended operations and restricted access to deposits.
On Thursday, the central bank announced payment of deposit guarantees. Eligible clients had balances up to 10 million guaranies, no outstanding debts to Ueno, and accounts at other financial institutions.
What the president said about his ties
Pena faced scrutiny over former business ties to Grupo Vazquez. The group controls Ueno Bank. Pena remained a business partner of the group until March 2025, according to AP.
Pena denied wrongdoing. He argued the controversy began as a regulatory matter and later became a political dispute.
Pena was elected in April 2023 and took office that August. He was serving a five-year term due to end in 2028.
How crypto users responded
A stablecoin is a digital token designed to keep a value close to a real-world currency, such as the US dollar. Tether's USDt is one example.
David Eisenmann, founder and CEO of Paraguayan crypto exchange X4T, said customers turned to crypto to pay bills and protect savings. Some cashed out holdings into guaranies or US dollars to pay salaries and settle debts. Others bought dollar-backed stablecoins.
Eisenmann said USDT and USDC prices in guaranies rose about 8% on X4T in recent weeks. He said the rise began in October and accelerated this week. He added that the increase could not be attributed entirely to Ueno Bank's collapse.
Tether CEO Paolo Ardoino wrote on X that USDt is a lifeline for hundreds of millions of people. Central bank data showed the dollar gained about 1.6% against the guarani between Oct. 1 and the month's final trading day. It remained about 2.8% below in 2026, according to the source.
Protests and detentions after the collapse
The collapse sparked protests in Asuncion, the capital. Hundreds of depositors, pensioners and workers demanded the return of savings and accountability from officials.
Authorities detained eight Ueno Bank executives on Nov. 3, including Grupo Vazquez president Miguel Vazquez and bank president Juan Manuel Gustale, according to local newspaper ABC Color. A court ordered six executives held in pretrial detention. Two others were placed under house arrest.
What happens next
Under Paraguay's Constitution, Vice President Pedro Alliana would succeed Pena for the remainder of the term if Congress accepts the resignation.
The central bank's deposit guarantee payments will continue for eligible clients under the announced terms. The source does not give a date for payments to clients with balances above 10 million guaranies.
Sources
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