Ueno’s Collapse Sends Paraguay’s President Exiting as USDt Hits a Premium

Paraguayan President Santiago Peña resigned Thursday amid a deepening political crisis triggered by the collapse of digital lender Ueno Bank. In a video posted to X, Peña said he was stepping down to preserve the country’s stability, social peace and democratic institutions. He added that his priority was protecting Paraguayans who had entrusted their savings to the financial system.

Paraguay’s central bank announced resolution proceedings for Ueno Bank on Tuesday after finding that its solvency ratio had fallen below half of the regulatory minimum. Peña faced mounting political scrutiny over his former business ties to Grupo Vázquez, the conglomerate that controls Ueno Bank. He remained a business partner of the group until March 2025, according to AP, and has denied any wrongdoing.

The banking crisis coincided with elevated asking prices for Tether’s USDt on Bybit’s Paraguay-facing peer-to-peer marketplace. One listing viewed early Thursday offered USDt at 6,942 Paraguayan guaraníes, approximately 13% above the central bank’s Nov. 4 dollar reference rate of 6,144.02 guaraníes per US dollar.

Peña’s resignation came as lawmakers debated impeachment proceedings over alleged conflicts of interest, misuse of pension funds and institutional cover-ups linked to Ueno Bank’s collapse, according to Reuters. Elected in April 2023 and sworn in that August, he was serving a five-year term scheduled to end in 2028.

Under Paraguay’s Constitution, Vice President Pedro Alliana would succeed him for the remainder of the term if Congress accepts his resignation.