Paraguay bank collapse shows stablecoins can offer a lifeline… of sorts
Ueno’s collapse exposed the fragility of digital banking in Paraguay, as customers scrambled for access to their money and stablecoins offered a lifeline.
The collapse of Paraguay’s digital lender Ueno Bank last week left nearly three million customers — roughly 60% of Paraguay’s adults — unable to access their accounts.
Paraguay’s Central Bank placed Ueno into resolution on Nov. 3 after its solvency ratio fell below half the legally required minimum. An investigation uncovered questionable lending practices and deficiencies in credit documentation and accounting.
The collapse also triggered a political crisis, with thousands taking to the streets to protest and President Santiago Peña attempting to resign before being impeached and arrested on charges of breach of trust and using his office for personal gain.