Paraguay's political and financial crisis deepened this week after Ueno Bank, a once-celebrated digital lender, collapsed, freezing millions of accounts and triggering impeachment proceedings against President Santiago Pena. Pena resigned Thursday, November 5, following the collapse and amid widespread street protests.
Launched in 2021 and licensed as a bank in 2023, Ueno grew rapidly from a niche fintech into one of Paraguay's four major banks, acquiring Vision Banco in 2024. By June 2026, it reported 2.94 million customers - about 63% of the adult population - and held roughly $850 million in state funds, making it the second-largest holder of public money behind the state-owned BNF.
As of November 2, the Central Bank of Paraguay moved to resolve Ueno due to its solvency ratio falling below 50% of the minimum legal requirement. Regulators are investigating allegations of excessive lending to businesses associated with the controlling stockholder, Grupo Vazquez.
Customers were unable to log into the bank's mobile app, and pensioners receiving government benefits through Ueno found their funds inaccessible. The government is ensuring that accounts are transferred to other financial institutions to protect deposits; Mr. Pena passed legislation to provide faster payments to affected depositors.
Additionally, the bank had raised about $510 million in financing, including $350 million in Wall Street bond issuance. Pena, who took office in 2023, was a shareholder of Grupo Vazquez until he sold his shares in 2025.
While he denies any involvement, opposition congressmen accuse him of conflicts of interest, misusing pension funds, and covering up the scandal. The government is probing the fiasco, and arrest warrants have been issued for eight Ueno executives.
Although Pena resigned on Thursday, Congress refused to accept his resignation, and impeachment proceedings continue. The situation remains volatile as citizens demand accountability for the loss of public funds and the collapse of the nation's digital banking infrastructure.
International financial observers are closely monitoring the situation, noting that the collapse of such a significant digital lender could have long-term implications for Paraguay's fintech sector. The government is currently working with international auditors to trace the missing assets.
Protests have erupted in the capital, Asuncion, with demonstrators calling for a full investigation into the ties between the executive branch and the banking sector. Security forces have been deployed to maintain order as the political deadlock persists.
As the impeachment process moves forward, the legal team for the former president maintains that he acted within the bounds of the law. The coming days will be critical in determining the future of the administration and the stability of the Paraguayan economy.