Paraguay is confronting a severe financial and political crisis after the collapse of Ueno Digital Bank, which froze about three million customer accounts and triggered the resignation of President Santiago Peña. The central bank placed Ueno into resolution on November 3 after regulators found its solvency ratio had fallen below half the legal minimum, following accounting changes that shut down the bank’s app, cards and transfers.
Peña announced his resignation on November 5, saying in a video message: “I want to apologise to the people if at any point I failed.” Minutes later, the lower house of Congress voted 78-0 to impeach him, sending charges to the Senate. Lawmakers accused Peña of conflicts of interest because he was a shareholder until last year in a company linked to the bank’s owners. Peña denied wrongdoing and said he sold his stake in March 2025. He said he was stepping down to protect stability, social peace and democratic institutions.
Ueno served roughly 60% of Paraguay’s adult population and held about $800 million in public-sector deposits, including pension and health funds. The central bank announced a deposit guarantee of up to 228.3 million guaraníes, about $36,000 per depositor. First payments will go to small depositors holding no more than 10 million guaraníes, provided they have no debts with Ueno and hold an account at another financial institution. The central bank called Ueno’s failure an isolated case, but protests erupted near Congress. One protester told AP: “Santiago Peña and the Colorado Party have stolen all our savings.”
The crisis has also renewed the Bitcoin self-custody debate. Supporters argue that privately held Bitcoin cannot be frozen when a bank fails, while critics note self-custody carries risks such as lost keys, theft and price volatility. Congress has scheduled a special session for Friday, when Peña is expected to present his defense.
