What began as fintech inclusion dream ended as South America's biggest political crisis in decade.
Ueno started 2021 as small digital wallet, got banking licence Nov 2023, branded "2 of 3 Paraguayans use us." Low-income customers flocked for free app. Government did too — Ueno ended handling state pensions and accounts of several state entities plus $850m public funds.
On Nov 3, Central Bank (BCP) placed Ueno SA into resolution after solvency ratio fell to below half legal minimum after adjustments. Bank had lent more than capital allowed to connected firms in Grupo Vazquez, regulators say. Next day, BCP seized it, froze deposits of 1.8m depositors / 2.9m customers — almost half population of 6.1m nation. ATMs dead, Mercado 4 vendors — 80% on Ueno — saw sales crash 70%.
Protests erupted Nov 5. Thousands outside Congress in Asunción burned Ueno cards, Pena effigy.
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Conflict of interest exploded: President Santiago Peña, economist, Trump ally, had stake in Grupo Vazquez until 2024. He appointed Ueno's former president Carlos Carvallo as Central Bank chief. Carvallo then allegedly looked other way. Attorney General probes both for “supervision and resolution of Ueno and placement of public funds.”
Peña offered resignation Nov 5, apologised. Parliament refused to just accept resignation — wanted to strip presidential immunity. Senate voted 44-0 (1 absent) Nov 6 to impeach him for "poor performance." House also tried to impeach VP Pedro Alliana but failed; Alliana sworn as president to finish mandate until 2028. Peña now in pretrial detention facing up to 15 years for self-enrichment and breach of trust, denies wrongdoing.
Scandal cascade: Central Bank President Carvallo resigned, Interior Minister Enrique Riera resigned, 8 Ueno execs arrested. Nov 10, prosecutors raided ITTI (tech firm of Grupo Vazquez) and Peña's luxury summer home in San Bernardino, found concealed armored vault behind false wall, allegedly financed by two simultaneous $580k Ueno loans May 2024.
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Payout: BCP via Deposit Guarantee Fund began advance payments Nov 5 afternoon. By Nov 8, ∼$160m to 1.2m people, capped at ∼$1,600 first phase if they had account elsewhere. By Nov 12, BCP said all affected depositors partially repaid and 95% of clients transferred. Guarantee covers up to ∼$36,000 — uncertainty over public funds and bigger depositors remains. Prosecutors sought help from US, Luxembourg, Argentina to trace missing assets.
Paraguayan crypto P2P market surged — USDT trading at 6,942 guaranies vs official 6,144 — 13% premium — as people sought dollar escape.
Alliana appointed Jorge Schreiner new central bank chief and reshuffled cabinet.
Lesson: digital inclusion without capital controls can lock a nation.
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