How a bank collapse left millions in limbo and toppled Paraguay's president
ASUNCIÓN, Paraguay — When Ueno Bank's services abruptly stopped working in the early hours of Tuesday morning, the consequences were immediate for the millions of Paraguayans who had come to depend on it for everyday transactions.
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who → leave → transactions
"People don't have any trust," said Elizabeth González, a 28-year-old barista at a café in downtown Asunción, a few blocks from Paraguay's Congress building, where protesters had begun gathering after the bank's collapse was announced Tuesday.
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collapse → have → building
Earlier, one customer had walked into the café and insisted on paying in cash.
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customer → walk → cash
He no longer trusted any bank.
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He → trust → bank
"If Paraguayans themselves aren't confident right now, foreign investors will be less so," González said.
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González → say → ?
The collapse affected far more than the bank's shareholders.
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collapse → affect → shareholders
Ueno said it had 2.9 million customers — around 60% of Paraguay's adult population.
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it → say → population
The Central Bank said the bank had approximately 1.8 million depositors.
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bank → say → depositors
By Saturday, authorities said almost 1.2 million customers had received an advance payment under the state's deposit guarantee fund, but many were still waiting.
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many → say → fund
It also led to the impeachment and removal of President Santiago Peña, a close ally of President Donald Trump, and exposed a power struggle inside within the ruling Colorado Party.
The anger was palpable outside Congress on Friday, where hundreds had gathered to protest not only their inability to access their money but also what they saw as a broader failure of accountability.
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they → lead → accountability
"I came not because it affects me personally, but because it affects all of Paraguay," said Elodia Saveredo, a 71-year-old housewife who sells her own handicrafts online.
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who → come → handicrafts
Batarram Caballero, a 23-year-old fifth-year biochemistry student and president of the student center at the National University of Asunción, said classmates had money frozen that they needed to cover basic expenses.
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they → say → expenses
It was money for their food," she said.
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she → say → food
"To hear that and not be able to do anything because I don't have the resources to help them is very discouraging.
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I → hear → them
Ueno Bank launched as a fintech in 2021 and began operating as a bank in November 2023.
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Bank → launch → November
Its meteoric rise to become one of the country's most important financial institutions was driven by slick marketing and a digital model based around convenience and cashback deals; customers could open accounts on their phones and were offered incentives to process payments through the platform.
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customers → become → platform
Caballero believes the crisis was foretold by an intense campaign in the days before accounts were frozen.
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accounts → believe → days
"They were bombarding us with messages telling us to put our money there," she said.
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she → bombard → money
"There were also rumors about what was already on the cards."
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what → be → cards
The bank also held substantial public funds.
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bank → hold → funds
The Social Security Institute, known as IPS, had around $355 million invested in Ueno, roughly 9% of its portfolio.
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Institute → know → portfolio
The sums involved have raised questions about how such a young bank came to hold so much public money.
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bank → involve → money
Manuel Ferreira, an economist and former finance minister, told local outlet ABC Color that the collapse raised fundamental questions about how the bank managed its assets.
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bank → tell → assets
He pointed out that, in a typical bank, shareholders provide only a small portion of the money behind its assets, while the bulk comes from customer deposits.
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bulk → point → deposits
He also argued that marketing and discounts helped attract customers but did not create lasting assets.
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marketing → argue → assets
A bank's principal asset, he said, was its loan portfolio: money owed by borrowers.
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he → say → borrowers
But in the case of Ueno, many of those loans had gone to companies directly linked to the bank's controlling owners, Grupo Vásquez, including $146 million in loans made to just three companies.
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many → go → companies
He described Ueno's promissory notes as being signed by the same people on both sides of some transactions.
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He → describe → transactions
The scandal hit Peña particularly hard because of his personal links to the bank's holding company, in which he held shares even after taking up the presidency.
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he → hit → presidency
He also appointed Carlos Carvallo, who had led Ueno Bank, to head Paraguay's Central Bank in 2023.
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who → appoint → 2023
In his asset declaration submitted weeks after taking up the presidency in 2023, Peña listed shares in Ueno Holding, then valued at around $845,000.
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Peña → submit → 845,000
Those shares represented around 1.6% of the company's paid-up capital when he later sold them in March 2025.
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he → represent → March
Prosecutors allege that, while president, he used his position to influence public agencies and state-owned entities to maintain deposits with the bank despite his connections to its parent group.
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he → allege → group
Peña resigned Thursday and was impeached and removed from office Friday.
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Peña → resign → office
The following day, prosecutors charged him with breach of trust and administration for personal gain.
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prosecutors → charge → gain
He was ordered held in pretrial detention at a military facility pending the investigation.
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He → order → investigation
Peña has pleaded not guilty.
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Peña → plead → ?
Pedro Alliana, the country's vice president, has been sworn in as president to serve out the rest of Peña's term until August 2028.
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Alliana → swear → August
Carvallo was also arrested and charged with breach of trust, administration for personal gain and producing false public documents.
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Carvallo → arrest → documents
A judge ordered him held in pretrial detention at a police facility.
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him → order → facility
…and 20 more, not listed.
The Aporia
