Media outlets in Ueno’s financial group, including La Tribuna, see operations suspended
The first payments reached a narrow slice of Ueno Bank’s frozen depositors on Friday: Paraguay’s central bank began paying customers holding up to $1,565 who had no outstanding debts and an existing account at another institution. A guarantee fund covers deposits of up to $38,000 — a ceiling that would apply to more than 90% of individual account holders — but most affected people still have no access to their money.
Paola Benítez, a 25-year-old chef from the capital, Asunción, met all three requirements, but by late Friday afternoon she had not yet recovered the money she had been saving for her wedding. “This has made me a bit anxious, a bit desperate too, because honestly, who am I supposed to go to and ask about this? It’s very strange, very confusing, very sad,” she said.
Pedro Volpe, a 50-year-old writer and lawyer, had just woken up last Tuesday when a message arrived from a friend asking whether his bank account was down, too. It was the day after payday, and when Volpe opened his banking app, he panicked: he could not even see his balance.
Volpe was among nearly 3 million Paraguayans — about 60% of the country’s adult population — whose accounts were frozen overnight, all of them customers of Ueno, a digital lender that expanded aggressively across the South American country in recent years. The central bank ordered Ueno into resolution over insolvency on Monday night. Ueno sits at the center of a political and economic crisis that has brought Paraguay’s banking system to the brink of collapse.
“It was very easy to use and to open an account,” Volpe said, recalling that everything could be done quickly on a mobile phone and that the bank offered far more generous investment returns than its competitors did. “Now I’m having to work miracles to pay my bills,” he said. “A lot of people can’t even afford basic everyday things like food; luckily, I still had some money saved elsewhere, but that has only got me this far. I don’t know what I’ll do next week.”
The crisis has already ended Peña’s presidency. The former president was impeached and placed under house arrest on Friday. He had resigned in an attempt to keep the special jurisdiction Paraguay’s constitution gives former presidents, who become senators for life, signing his resignation letter in Asunción on 5 November. Lawmakers stripped him of the seat anyway, meaning he will face criminal proceedings in the ordinary courts.
The reversal came fast. Peña went, within days, from being regarded as a market favorite among Latin American presidents and one of Donald Trump’s key allies in the region to facing fierce mass protests, including demonstrations in Asunción on 5 November, a congressional vote to remove him from office and house arrest, according to The Guardian’s reporting.
Ueno’s ubiquity reflected its rapid rise: in just a few years after Peña took office in 2023, it went from an obscure digital lender to the bank of choice for most Paraguayans, sponsoring the national football team, the league and the country’s biggest football clubs along the way. The bank served such a large share of the population that businesses have already reported an overall fall in sales of up to 80% this week.
The fallout reached well beyond depositors. Media outlets belonging to the same financial group as the bank, including radio stations and the century-old newspaper La Tribuna, had their operations suspended, and 300 workers saw their salaries suspended, initially for 90 days. About 32,000 pensioners whose public pension funds had been invested in the bank were left without payments.
“A lot of people are also not working because they can’t get paid or make payments,” said Fabián Chamorro, a historian and political analyst. “Meanwhile, the protests were growing every day, and Peña’s impeachment was the way congress found to prevent a popular explosion.”
Chamorro said that during Peña’s administration, Ueno began receiving various benefits and that the government relaxed the rules to allow public funds to be invested in the bank. An estimated $800 million to $860 million in state and pension funds were invested in Ueno.
A former finance minister who had also worked at the central bank and the International Monetary Fund, Peña was elected in 2023 on a promise to restore a “great Paraguay” and attract foreign investment. He took office at 44 as the youngest president in Paraguay’s democratic history.
Soon after taking office, Peña appointed Carlos Carvallo Spalding, until then Ueno’s chief executive, to lead the central bank. Less than three months later, Spalding authorized Ueno, then a finance company, to become a digital bank.
Peña himself held about $1 million in shares bought in 2019 in a company that became Ueno Holding in 2022, the parent company of the conglomerate that controlled Ueno Bank. He did not dispose of the shares until April 2025, after he had become president, and said he had bought them purely as an “investor.”
The public prosecutor’s office is investigating Peña over alleged favoritism toward Ueno and on suspicion of illicit enrichment, money laundering and influence peddling. Peña denies all the allegations, and his lawyers said there is no evidence he directed the allocation of pension funds to the bank. In recent months, local media revealed a series of internal central bank reports pointing to irregularities, including loans to companies within the same group; Peña dismissed them as a “false media campaign” against his government.
The central bank ordered Ueno into resolution only after mounting pressure from other banks and opposition lawmakers, and with the bank holding less than half the solvency required to meet its obligations. Spalding resigned and, like Peña, was ordered arrested on Friday night. Police had already arrested eight senior executives and directors of Ueno and its controlling group during the week on suspicion of concealing the bank’s deteriorating financial position for months.