How a digital bank’s collapse toppled Paraguay’s president
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collapse → topple → president
For years, Paraguay’s digital bank, ueno, stood out as a homegrown success story, luring roughly half the country's people to open accounts and offering many the opportunity to hold a bank account for the very first time.
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bank → stand → time
But over just five days this week, the bank collapsed, freezing the savings of nearly 3 million customers — in a country of 6.5 million people — and triggering the country’s deepest political crisis in more than a decade.
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bank → collapse → decade
On Friday evening, President Santiago Peña was impeached after attempting to resign, and his vice president, Pedro Alliana, was sworn in as his replacement.
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president → impeach → replacement
Authorities quickly arrested Peña, an economist and close ally of US President Donald Trump, and prosecutors charged him on Saturday with breach of trust and administration for personal gain.
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prosecutors → arrest → gain
A judge ordered him held in pretrial detention at a military facility.
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him → order → facility
Peña has denied wrongdoing and his attorney, Ricardo Preda, told journalists that he was pleading not guilty to the charges.
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he → deny → charges
The scandal has triggered public protests and sharp rebukes from the opposition.
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scandal → trigger → opposition
“We are facing the biggest corruption scandal in our democratic history,” said opposition Senator Rafael Filizzola on Friday.
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Filizzola → face → Friday
"This impeachment is a first step toward ensuring justice is served."
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justice → ensure → ?
Manuel Ferreira, a Paraguayan economist and former finance minister, echoed much of the public anger over the case.
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Ferreira → echo → case
“This was a modern-day Bonnie and Clyde,” he said.
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he → say → ?
“They didn’t rob us with a pistol, they robbed us with an app.
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they → rob → app
CENTRAL BANK CHIEF ALSO CHARGED
Until March 2025, Peña had been a business partner of the group that owns ueno.
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that → charge → ueno
After his election in 2023, he tapped ueno's former president, Carlos Carvallo, to lead the central bank.
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he → tap → bank
Carvallo resigned as central bank chief earlier this week.
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Carvallo → resign → chief
Prosecutors charged him on Saturday with breach of trust, producing false public documents and administration for personal gain.
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Prosecutors → charge → gain
They sought his pretrial detention, which was approved by a judge.
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which → seek → judge
Carvallo did not respond to a request for comment.
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Carvallo → respond → comment
It was not immediately clear if he had entered a plea in the case.
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he → enter → case
Peña’s lawyer, Preda, objected to the impeachment, saying that ousting a president during a bank resolution could itself be destabilizing.
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ousting → object → resolution
“What sets a serious country apart is not that its banks don’t fail, but how it responds,” Preda said on Friday.
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Preda → set → Friday
“If there is one thing that undermines confidence in the financial system, it is attempting to oust the president without evidence.”
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it → be → evidence
Ueno was launched in 2021 as a sleek, millennial-friendly banking app that quickly won over Paraguayans who had been underserved by brick-and-mortar institutions.
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who → launch → institutions
It soon became deeply embedded in Paraguay's payments system.
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It → embed → system
It paired its digital offering with physical branches, later sponsoring sports teams, businesses and events.
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It → pair → teams
As of June, public institutions — including Paraguay's state pension fund — held roughly $850 million in accounts with the bank.
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institutions → include → bank
But in recent months, internal regulatory reports warning of excessive lending to certain companies were leaked to local media outlets ABC and Última Hora, triggering political scrutiny of the bank's lending practices.
Following growing public pressure, Paraguay’s central bank on Tuesday put ueno into resolution — its strongest measure short of immediate liquidation — after determining that ueno had breached minimum solvency requirements, locking millions of customers temporarily out of their accounts.
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ueno → warn → accounts
The central bank said on Saturday that the equivalent of $160 million had since been paid out to nearly 1.2 million savers under the state deposit guarantee scheme.
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equivalent → say → scheme
Authorities have promised that depositors will be reimbursed and say the crisis is confined to ueno.
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crisis → promise → ueno
But analysts say the damage to Paraguay’s reputation as a stable investment destination in South America may linger far longer than the bank resolution itself.
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damage → say → resolution
“This is the moment when Paraguay must demonstrate that its institutions are functioning,” Ferreira said.
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Ferreira → demonstrate → ?
The Aporia
