A digital bank’s collapse toppled Paraguay’s president within days — and cracked the myth of the ‘Dubai of South America’
Promoted by some as a “ Dubai of South America,” the country also became a magnet for conservative influencers, particularly from Brazil, who contrasted Paraguay’s economic model with the purported mismanagement of left-wing governments elsewhere in the region.
Key points
- As scholars with expertise in various aspects of Paraguay’s contemporary political, economic and environment development, we believe the collapse raises troubling questions about who benefits from financial modernization, who controls it and who bears the risks when it fails.
- Carlos Carvallo chaired Ueno’s predecessor bank before Peña appointed him Paraguay’s central bank president in 2023.
- A bank that grew faster than scrutiny Founded as a digital lender in 2021, Ueno attracted customers with mobile banking and cash-back offers.
Indeed, under President Santiago Peña, Paraguay has been one of Latin America’s most enthusiastic allies of the Trump administration and its expansive regional vision.
Additional details
- That included a supervisory report put out by the bank regulators in June 2026 that described roughly US$146 million in loans to three companies linked to Grupo Vázquez, Ueno’s controlling shareholder.
- 2, when the central bank placed Ueno into resolution, a process similar to bankruptcy but managed directly by Paraguay’s central bank.
- Peña, an economist by training who was elected president in 2023 and had close ties to the bank, resigned on Nov.
- Ueno, a bank celebrated for expanding financial access to ordinary Paraguayans, grew through unusually close relationships with political elites and public institutions.
- He was swiftly put under house arrest, charged with corruption and succeeded by his Vice President Pedro Alliana, who was sworn in to serve until 2028.
How this summary was made: extractive summary — built from the sources' own reporting. It is drawn only from the reporting of the sources listed below — read the originals for full detail. How we summarize →
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