Ueno Bank Crisis: Is Paraguay Still a Serious Option in 2026?

In early November 2026, the Central Bank of Paraguay placed Ueno Bank in resolution, and within days the fallout had claimed first the Central Bank's president and then the President of the Republic. For anyone planning to settle in Paraguay, the question is a fair one: is the country still a serious option for living, doing business or establishing tax residence?

The Ueno Bank crisis is serious, and it would be dishonest to play it down. Yet its consequences for a relocation plan are smaller than they might appear: to date, no immigration or tax rule is known to have been adopted as a result of the crisis, but it does call for real discipline in how you hold your money.

01What happened at Ueno Bank

Ueno Bank, a digital-native Paraguayan bank, was placed in resolution by the Central Bank of Paraguay (BCP) on 2 November 2026 because its solvency had fallen below half the legal minimum. The BCP's board took the decision unanimously and announced it during the night, and customers abruptly lost access to their app, their cards and their ability to make transfers.

Rapid growth and loans to the shareholder's companies

Ueno started out as a finance company, obtained its banking licence in late 2023, absorbed Visión Banco in 2024 and, according to the rating agency FIX, held around 9% of the system's deposits by the end of 2025. To our knowledge, it was also the only bank in the country (as opposed to a mere finance company) that would open an account for a foreigner who did not yet have a tax number (RUC); many recent arrivals had made it their main bank. The heart of the matter can be stated simply: the bank lent its depositors' money to companies linked to its shareholder, Grupo Vázquez. The Paraguayan press has documented some USD 146 million in loans to three of them; once these loans were restated in the accounts, the bank's solvency collapsed.

A resolution, not a bankruptcy

Ley N° 2334/2003, the deposit guarantee law, makes solvency below 50% of the legal minimum grounds for resolution, which the BCP must open within 24 hours of becoming aware of it (art. 13 and 14). The General Banking Law sets the minimum solvency ratio (regulatory capital) at no less than 12% of risk-weighted assets and commitments, of which 8% must be core capital; the BCP may raise this minimum by no more than one point a year, up to a ceiling of 14%, and may require an institution to hold up to 3% in additional capital, depending on its systemic importance or risk profile (Ley N° 861/1996, art. 56, as amended by Ley N° 5787/2016).

From bank failure to political crisis

The political side of the affair stems from the bank's closeness to those in power: Carlos Carvallo had chaired Ueno before being appointed head of the BCP in 2023, and more than USD 800 million of public money, a large share of it from the salaried workers' pension fund (IPS), was deposited with the bank.

1. 3 November 2026

   Central Bank president resigns

   Carlos Carvallo resigns as president of the Central Bank.
2. 5 November 2026

   Resignation rejected

   President Santiago Peña announces his resignation; Congress refuses to accept it.
3. 6 November 2026

   Removal and succession

   Impeached by the Chamber of Deputies, he is removed from office by the Senate by 44 votes for “mal desempeño de sus funciones” (poor performance in office); Vice-President Pedro Alliana succeeds him and will serve until 15 August 2028.
4. In the days that followed

   Criminal proceedings

   Prosecutors charge Santiago Peña with breach of trust (lesión de confianza) and with administering for his own benefit, and he is remanded in custody pending trial; he denies any wrongdoing.

The impeachment, removal and succession all followed the procedure laid down in the Constitution (art. 225, 227 and 234). It also denies a removed president the life seat in the Senate reserved for democratically elected former presidents (art. 189). The criminal proceedings, however, do not amount to a conviction.

02Are Ueno's customers getting their money back?

Ueno Bank depositors entitled to the guarantee are repaid by the Deposit Guarantee Fund (FGD) up to 75 monthly minimum wages per person, per bank. For a resolution opened on or after 1 July 2026, when Decreto N° 6225/2026 raised the minimum wage to 3,044,000 guaraníes, that comes to 228,300,000 guaraníes. The ceiling applies to a person's total deposits at the bank, not account by account.

What the deposit guarantee covers

The guarantee covers deposits of any kind, in guaraníes or in foreign currency, at banks, finance companies and housing savings and loan companies. It does not, however, cover every product a bank may offer.

Repayment in stages, already well advanced

On 4 November, Congress passed Ley N° 7745/2026, known as the “Ley Ueno” (the Ueno law), which creates an advance payment against the guarantee: up to 40 minimum wages (121,760,000 guaraníes), or the customer's net balance if lower, calculated after deducting any debts already due (Ley N° 2334/2003, art. 1° bis, inserted by Ley N° 7745/2026, art. 1). Persons related to the bank, depositors excluded from the guarantee and holders of accounts frozen by a court or administrative order are not entitled to it. The law allows the Fund to claw back any amount overpaid or paid in error, which could affect a customer whose final set-off, with all debts treated as due, brings the guarantee below the advance already received.

The payment procedure for the advance must start within 24 hours and may not take more than five working days, counted from the law's entry into force for a resolution already in progress, such as Ueno's, and from the approval of the resolution in later cases. The rest of the guarantee is then paid within the ordinary statutory time limit.

By 9 November 2026, according to the Central Bank, 1,738,804 depositors, or 93.1% of beneficiaries, had received an advance, totalling 2,126 billion guaraníes (more than USD 340 million); on the ground, we have seen depositors repaid in full within 72 hours. The following day, President Pedro Alliana reported that nearly 95% of savers had been paid. These are advances, which do not always amount to full repayment: some 128,000 accounts were still pending, including frozen accounts and certificates of deposit.

The advance is paid into an account the customer holds at another bank; for the roughly 262,000 customers who had no such account, a savings account was opened in their name automatically. No registration or private intermediary is needed: customers can find their assigned bank on the BCP's official platform, and complaints should be sent to pagosacreditadosfgd@bcp.gov.py.

What remains uncertain

The law requires the guarantee to be paid no later than fifteen calendar days after the approval of the resolution, a deadline the BCP may extend by a further fifteen days by means of a reasoned resolution (Ley N° 2334/2003, art. 1 h); the FGD regulation applies this time limit where the deposits cannot be transferred to another bank or a transfer would be ineffective (Resolución BCP N° 3, Acta N° 11 de fecha 25 de febrero de 2021, art. 11). For Ueno, this points to mid-November, or early December if the deadline is extended.

03Is the rest of the Paraguayan banking system affected?

Paraguay's banking system is operating normally, and the Central Bank describes the Ueno case as confined to a single institution. According to the BCP, the system-wide capital ratio stood at 16.95% and the non-performing loan ratio at 2.53%, levels far removed from Ueno's.

What the indicators and the authorities say

On 4 November, the BCP denied rumours of interventions at other banks and attributed the slowness of their apps to a wave of new account openings. As of 10 November 2026, no rating agency had changed Paraguay's sovereign rating, which remains investment grade at Moody's (Baa3) and S&P (BBB-). The guaraní, on the other hand, fell more than 8% against the dollar in a matter of days at the height of the political crisis, before recovering some of its losses.

“Ueno is the first domino”: what the facts say

Some commentators have warned of contagion to other banks. So far, nothing suggests it: no other intervention has been ordered, the major banks are functioning, and the FGD paid an advance to more than 93% of beneficiaries within a week of the resolution. The crisis of the late 1990s, when 13 banks and 35 finance companies closed (IMF figures cited by researchers at Colorado State University), shows above all what has changed since: there is now a deposit guarantee and a resolution procedure.

04What the Ueno Bank crisis does not change if you are moving to Paraguay

To date, the Ueno Bank crisis has not led to any known new immigration or tax rules: the residency routes and tax framework that apply to foreigners settling in Paraguay are the same as before. A relocation plan rests on these fundamentals, not on the headlines about one bank.

Residency

Nothing in the immigration rules we have examined requires a permanent resident to keep their savings in a Paraguayan bank. An investor who obtained residency through financial instruments, using the foreign investor certificate issued by the Ministry of Industry and Commerce (Constancia de Inversionista Extranjero), must hold that investment for at least two years and report on it annually (Resolución MIC N° 283/2026, Anexo I, art. 1 d); the productive and tourism routes, for their part, require a progress report on the project every six months (Anexo I, art. 3 and 4). Permanent residency may also be cancelled by a reasoned resolution of Migraciones after an unjustified absence of more than three consecutive years, unless authorised; for a temporary resident, the threshold is more than one year (Ley N° 6984/2022, art. 55).

For new permanent residency applications, Resolución DNM N° 407/2026 sorts proof of financial solvency into twelve categories. Remote workers and digital nomads submit an employment certificate stating their income and how it is paid, which must be legalised or apostilled and translated if issued abroad; the published text mentions a further acceptable document but omits it. Migraciones assesses solvency both when the application is filed and while it is being processed. Our guide to permanent residency goes through each category.

Territorial taxation

Personal income tax (IRP) is levied on Paraguayan-source income, meaning income from activities carried out in Paraguay, assets located there and rights exploited there; the law also brings within its scope income from capital invested in Paraguay, remuneration paid by the State, and personal services rendered outside Paraguay by an IRP taxpayer to IRE (corporate income tax) or IRP taxpayers (Ley N° 6380/2019, art. 48). According to the tax authority's reply of 22 December 2025 to a ruling request (Consulta Vinculante DNIT N° 828/2025), which settles a specific case rather than laying down a general rule, a service performed from Paraguay for a foreign client is taxable, whereas one performed abroad for a foreign client is not.

The law also exempts interest on deposits with Paraguayan banks and finance companies, as well as foreign exchange differences on foreign currency deposits (art. 56). Our guide to the Paraguayan tax system covers these rules in detail.

Doing business and working remotely

Setting up a company or working remotely from Asunción is governed by the same rules as before the crisis, since no new legislation is known to date. The only practical change concerns cash management: a business that ran all its payments through a single institution was brought to a standstill overnight. Our guide to digital nomad life in Paraguay covers the practicalities of this lifestyle.

05What the crisis does change: organising your money in Paraguay

What the Ueno Bank crisis chiefly changes is how an expat should organise their money in Paraguay: using several banks, staying within the guaranteed ceiling and paying real attention to currency risk. These principles hold anywhere, but the Ueno affair has made them very tangible.

Spreading your deposits within the guaranteed ceiling

The guarantee of 75 minimum wages (228,300,000 guaraníes at the minimum wage applicable since 1 July 2026) is calculated per person, per bank. It is therefore sensible to open accounts with at least two different institutions and to keep in each no more than the guarantee covers, or than you could afford to have frozen for a few weeks. Larger sums are often better held outside Paraguay, which residency does not prevent, subject to the caveat that applies to the investor route.

Choosing a bank for its soundness, not its app

Ueno had won customers with an easy-to-use app, accounts opened without a RUC and generous cashback on purchases: three selling points that say nothing about how sound an institution is. Track record, size, ownership and regular financial reporting are more reliable indicators. Our guide to banks in Paraguay reviews the institutions that open accounts for foreigners.

Allowing for currency risk

The guarantee covers foreign currency deposits, but the Paraguayan press reports that Ueno's are being repaid in guaraníes; we have found no legal provision specifying the currency of repayment. When the guaraní weakens, a dollar deposit repaid in local currency can therefore lose some of its value. Keeping part of your savings in the currency you earn in, outside the local system, reduces that risk.

Beware of fake intermediaries

The crisis has prompted messages offering to speed up repayment for a fee. The Ueno advance is paid without registration, fees or private intermediaries, and only the BCP's official channels (its platform and its press releases) can be relied on, including for the rest of the guarantee payout. For that stage, the FGD regulation provides for depositors to be summoned by public notices stating the date, time and place, and the documents to bring. Our article on residency scams in Paraguay recommends the same precautions.

06Should a country be judged by its scandals?

No country is immune to a bank failure, and Paraguay should be judged on how its institutions respond rather than on the fact that a scandal occurred. Brazil liquidated Banco Master in November 2025, with a guarantee limited to 250,000 reais per customer, per institution, and the United States closed Silicon Valley Bank in March 2023: in both cases, it was the depositor protection rules and the way they were applied that made the difference.

In Paraguay, the Central Bank applied a procedure that has existed since 2003, Congress passed an advance-payment law within two days, and the removal of the head of state and his succession both took place within the constitutional framework. None of this proves that everything works perfectly, but it does show that the mechanisms exist and have been used, including against people close to those in power. Three things remain to be watched: the fate of deposits above the ceiling, the appointment of independent leadership at the Central Bank, and the outcome of the investigations into banking supervision and the placement of public funds.

07Conclusion: the Ueno Bank crisis calls for caution, not for giving up

The Ueno Bank crisis has exposed failures of supervision and murky ties between a bank and those in power. It should neither be played down nor taken as proof that the entire Paraguayan system is failing: the deposit guarantee has been triggered on a large scale, the rest of the system is working, and the residency rules and territorial taxation that attract entrepreneurs, freelancers and digital nomads from around the world remain in place.

Paraguay is not without its constraints. It remains a serious option, provided that residency, tax and banking are planned together. That is what our support is for: helping each client choose their banks with confidence and introducing them to those banks, in line with their personal, wealth-planning or business goals, notably as part of the SUACE programme (the State's one-stop shop for company formation) or the Investor Pass.

08Frequently asked questions

Official sources