Paraguay’s President, Santiago Peña, has resigned following the collapse of ueno, a major digital bank whose financial troubles triggered a political crisis and raised questions about regulatory oversight and alleged conflicts of interest.
Launched in 2021, ueno grew rapidly to become one of Paraguay’s biggest digital lenders, with about three million customers in a country of 6.5 million people.
By June, the bank said it administered approximately $850 million in public funds, including money belonging to state institutions and pension-related bodies.
The crisis escalated after Paraguay’s central bank found that ueno had breached minimum solvency requirements and placed it under resolution.
The intervention left millions of customers temporarily unable to access their accounts, while some depositors, including pensioners, struggled to withdraw their savings.
Peña came under scrutiny over his previous business links to Grupo Vázquez, ueno’s controlling shareholder. He acknowledged holding shares in the group until March 2025 but denied having any direct ownership or investment relationship with the bank.
Opposition lawmakers accused the president of conflict of interest, misuse of pension funds and an institutional cover-up.
Prosecutors have also included him among those being investigated over the bank’s collapse though he has not been questioned. Arrest warrants were issued for eight ueno executives.
The controversy also prompted the resignation of central bank chief Carlos Carvallo, a former head of ueno, amid questions about whether the lender received adequate regulatory supervision.
The central bank maintained that Carvallo had withdrawn from decisions concerning the bank.
Authorities have begun arrangements to transfer ueno’s customer accounts to other financial institutions and protect public funds. Although officials insist the crisis is limited to the bank, concerns remain over its potential impact on Paraguay’s reputation as a stable investment destination.
