We Are All Paraguay

A digital bank with close ties to the Paraguayan President just collapsed taking the bulk of the savings of about half of the Latin American nation's with it.

The President, Santiago Peña, who aggressively pushed the bank for years, has resigned, though the legislature rejected this, and the lower house voted to impeach him.

Gee, a dodgy bank run by a bunch of tech bros implodes and leaves the rest of us holding the bag.

Why does this sound familiar?

Paraguay’s rightwing president, Santiago Peña, resigned on Thursday after a political and financial crisis collapsed the South American country’s banking system in recent days.

At the centre of the crisis is Ueno Bank, which in just a few years under Peña went from an obscure digital bank to one of the country’s largest lenders, claiming to have about 60% of Paraguay’s adult population as customers.


Last Monday, the central bank ordered Ueno into resolution over insolvency, freezing the deposits of 3 million customers, leaving hundreds of thousands of families without access to money for food and basic daily expenses. Bank executives were arrested, and people took to the streets in massive protests.

In power since August 2023 and with a term running until 2028, the 47-year-old economist was already facing impeachment proceedings that had broad support.

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Ueno Bank began as a finance company in the 1970s and, in 2021, was bought by Grupo Vázquez, one of Paraguay’s largest business and industrial conglomerates. At the end of 2023, it received authorisation from the central bank, already under Peña’s administration, to operate as a digital bank.

The bank rapidly expanded its operations, attracting customers with generous cash-back offers on groceries and sponsoring Paraguay’s national football team. On Wednesday, the players released a letter “demanding” a “forceful response” from the government and the justice system.

The bank came to manage between $800m and $850m in deposits from state and pension entities, including retirement funds, prompting criticism over conflicts of interest because of Peña’s previous shareholding ties to Ueno Holding.

Just to refresh your memory, Elon Musk wants to make Ecch (formerly Twitter) a bank just like Ueno.