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An unprecedented crisis: Millions of citizens lose money in Paraguay after the bankruptcy of a digital bank

2026-11-06 16:45:38Biznes SHKRUAR NGA REDAKSIA VOX

An unprecedented crisis: Millions of citizens lose money in Paraguay after the

An unprecedented financial and social crisis has erupted in Paraguay following the sudden collapse of Ueno Bank, the country's first and largest digital institution.

Within hours, the Latin American country's financial system was on the brink of chaos, leaving about 3 million citizens — roughly 60% of the adult population — without access to their money.

What started as one of the region's most successful financial technology (fintech) stories has turned into the biggest nightmare of depositors, who are now seeing their salaries, life savings, and pension funds frozen.

From the mobile screen to the "lock" of accounts

The panic began when Ueno Bank's mobile app, ATM network and all payment services were suddenly shut down, following an emergency intervention by the Central Bank of Paraguay (BCP).

Regulators made the drastic decision to seize and liquidate the bank after discovering that its capital had fallen to critical levels.

According to initial audit reports, the bank's executives violated the most basic financial security rules. They are accused of granting over $150 million in dubious, unsecured loans to shell companies that were secretly controlled by the bank's own managers and their parent company, Grupo Vázquez.

Chaos on the streets and empty banks

In the capital Asunción and major cities, the latest scenes are dramatic. Long lines of desperate people have surrounded closed bank branches and government officials, demanding the return of their funds.

Many of them are unable to even pay their monthly bills or buy food, as all their financial assets were linked to Ueno Bank digital cards.

"I came to collect my salary and everything is blocked. They told us that digital banking was the secure future, but they left us on the street without a penny," declared an affected citizen outside one of the liquidation centers.

Political tsunami: The resignation of the president

In addition to the economic tragedy for millions of families, this bankruptcy has also caused a powerful political earthquake. The country's president, Santiago Peña, resigned from office to avoid an embarrassing impeachment by Congress.

Recent investigations have revealed that Peña had not only been a shareholder in the bank's controlling group until 2025, but his government had transferred over $800 million in public funds and state pensions to this failed bank.

Furthermore, the former director of Ueno Bank had been appointed by the president himself to head the Central Bank, creating a blatant conflict of interest that allowed the crisis to be hidden for months.

What will happen to the savings?

While the government has passed emergency laws to kick-start the deposit insurance scheme, fears remain high. Local law only guarantees reimbursement up to about $38,000 per person.

For medium-sized businesses and large pension funds that had deposited millions in this institution, the chances of recovering their money remain minimal.

This scandal has called into question the security of the entire new digital banking system in Latin America, serving as a grim warning that behind the glitter of technology can often be hidden the oldest financial fraud schemes. ( Kapitali.al )


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