Ueno’s Exit Has Paraguay Asking the $BTC Question: Who Holds the Keys?

Paraguayan President Santiago Peña resigned Thursday after the collapse of digital lender Ueno Bank locked roughly three million customers out of their accounts, triggering a political crisis over the bank’s failure to protect savings, pension funds and public-sector deposits. “My greatest wish is that the return of those funds be guaranteed, that the Deposit Guarantee Fund fulfill its purpose,” Peña said in his resignation address. The lower house subsequently voted 78-0 to impeach him, sending the case to the Senate as Vice President Pedro Alliana prepared to succeed him.

Paraguay’s central bank initiated resolution proceedings for Ueno Bank on November 3 after regulators found that its solvency ratio had fallen below half the legal minimum following adjustments to the bank’s financial statements. Ueno’s app, cards and transfers were left out of service. The lender launched in 2021 and claimed around 2.9 million customers, more than 60% of Paraguay’s adults, while holding roughly $800 million to $850 million in public money, including state pension and health funds. The central bank said the failure was an isolated case and announced deposit guarantees of up to 228.3 million guaraníes per depositor, roughly $36,000, with initial payments targeting eligible accounts holding no more than 10 million guaraníes.

Peña, elected in April 2023 and sworn in that August to serve a five-year term scheduled to end in 2028, remained a shareholder in a company linked to Ueno’s owners, Grupo Vázquez, until March 2025. He has denied wrongdoing and said the controversy began as a regulatory matter before becoming a political dispute. A joint session of Congress called to accept his resignation adjourned without a quorum, according to La Nación, after which Peña said he would face impeachment and defend himself. The Senate rejected his request for 72 extra hours to prepare his defense and planned a removal vote for Friday night, ABC Color reported.

Thousands protested in Asunción, where demonstrators burned debit and credit cards outside Ueno’s headquarters. Former presidential candidate Paraguayo “Payo” Cubas was booed, shoved and forced out while protesters shouted “divisor” and “oportunista,” meaning divider and opportunist. “Santiago Peña and the Colorado Party have stolen all our savings,” protester Luis Pinedea told AP. “We are fed up with 70 years of plunder.” Horacio Cartes, the Colorado Party leader and Peña’s former political mentor, withdrew his support for Peña and backed the impeachment. “We will not be on the side of the plunder of public, private and retirees’ funds,” Cartes said. Interior Minister Enrique Riera and central bank president Carlos Carvallo resigned, eight Ueno executives were arrested, and prosecutors opened a criminal investigation into Peña’s possible responsibility for the bank’s irregularities, which he denies.

The disruption also tightened demand for dollar-linked digital assets. One early-Thursday listing on Bybit’s Paraguay-facing peer-to-peer marketplace offered Tether’s 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. The episode revived discussion about Bitcoin’s founding principle that customers can authorize transfers by controlling their wallet’s private keys without asking a financial intermediary to unlock an account—the distinction expressed as “not your keys, not your coins.” Bitcoin’s first block, mined in January 2009, included a newspaper headline about a second bailout for British banks, a historical reference frequently cited by supporters of self-custody.