Paraguay removes its president over a bank collapse, and bitcoin trades only 1.7% above the world price

Paraguay’s Senate removed President Santiago Peña from office on Friday 6 November at 18:55 local time (21:55 UTC), four days after the central bank seized Ueno Bank, the digital lender with about 3 million clients at the centre of the Paraguay bank crisis. Forty-four senators voted to remove him for “mal desempeño de funciones” (poor performance of his duties), according to the live timeline kept by ABC Color. Vice President Pedro Alliana was sworn in as president at 19:45. Última Hora called the Senate’s verdict unanimous.

Prosecutors had Peña detained at his home the same evening. Shortly before midnight he was moved to a military barracks, the Presidential Escort Regiment, because protesters had gathered outside the house.

For crypto, the Paraguay bank crisis has so far produced a small, measurable effect rather than a rush. On Binance’s peer-to-peer (P2P) market, bitcoin was quoted about 1.7% above the international price on 6 November, according to a reading by CriptoNoticias reported by CryptoSlate, which gives no time for it. Tether’s USDT traded 3% to 4% above the dollar on 5 November. The dollar itself rose about 10% against the guaraní in a week.

The agencies that published a count of the final vote differ on one detail. IANS, carried by The Hans India, wrote that all 44 senators present voted in favour. ANI, carried by The Tribune, reported 44 to 1. The Senate has 45 seats.

Ueno Bank held the savings of about 60% of Paraguay’s adults

Ueno is not a niche lender. Its roughly 3 million clients represent about 60% of the country’s adults, the Associated Press reported on 3 November. At the end of 2025 it was the fifth-largest private bank, with 8.9% of system deposits and 5.9% of loans, according to CriptoNoticias.

The central bank (BCP) board voted unanimously late on Monday 2 November to put Ueno into resolution, AP said; CriptoNoticias dates the decision to 3 November. Under Law 2.334/03, the trigger was a solvency ratio that fell below half the legal minimum after adjustments to the bank’s accounts, according to BCP statements compiled by ABC Color. CriptoNoticias put the ratio at about 5.56% against a 12% minimum, a figure we could not find in a BCP text.

Warnings had come earlier. AP reported that the BCP told Ueno in June it was lending too much to companies tied to its owners. Fitch moved the bank’s outlook to negative in October, citing fast balance-sheet growth and a high level of intangible assets. Less than a week before the seizure, Ueno announced a $100 million capital raise, half of it from its holding company.

Public money is what turned a bank failure into a political one. AP said Ueno managed $800 million to $850 million of public funds, including about $380 million from the state pension and health fund (IPS), and that the bank itself had said in October that public money made up about a quarter of its deposits. CriptoNoticias, citing Última Hora, said the IPS money includes the savings of some 32,000 retirees and that funds of the state power company ANDE and of the Itaipú dam were also frozen. No amounts were given for those two.

The bank belongs to Grupo Vázquez. Peña was a business partner of the group until March 2025, AP said. He denies any wrongdoing and says he sold his stake that month, according to CryptoSlate. By 3 November prosecutors had ordered eight arrests, including Ueno’s president Juan Manuel Gustale and its chief executive Federico Miguel Vázquez Villasanti, and two more directors were in custody by that afternoon, AP reported.

From bank seizure to removal in four days

Peña first tried to contain the damage. He asked the BCP president, Carlos Carvallo, to resign and agreed with congressional leaders to fast-track laws on depositor payouts and the return of public money, AP reported. Carvallo had led Ueno’s predecessor before Peña appointed him to the central bank. He signed his resignation but stayed on to oversee the takeover.

On Thursday 5 November Peña offered his own resignation. Congress did not accept it: the Senate voted 24 to 20 against, and a joint session broke down when lawmakers walked out and the lower house lost its quorum, IANS reported. The lower house voted 78 to 0 to open impeachment, according to Decrypt, the only outlet we found giving that figure. That night savers burned debit and credit cards outside Ueno’s headquarters in Asunción, and police used water cannon and tear gas on marchers near Congress, Decrypt said.

Horacio Cartes, leader of the ruling Colorado Party, backed the impeachment. “We will not be on the side of the plunder of public, private and retirees’ funds,” he said, in Decrypt’s English rendering.

The Senate trial ran through Friday. Peña asked for 72 more hours to prepare his defence and did not attend in person; ABC Color’s timeline gives the sequence in local time, which Paraguay has kept at UTC-3 all year since a 2024 law:

Minutes before midnight Peña was moved to the Presidential Escort Regiment, ABC Color reported; officials said his home in Asunción could not be secured with a crowd outside, according to Infobae. He is due at the public prosecutor’s office on Saturday 7 November at 11:00 local time (14:00 UTC) to give a statement, Infobae said. Prosecutor Christian Benítez said the inquiry covers, for now, alleged breach of trust, influence peddling and self-serving administration. Peña’s lawyer, Ricardo Preda, said his client will cooperate and has not yet been told the specific charges. ANI reported that the attorney general has opened three criminal cases against Peña and former officials.

Carvallo turned himself in to police on Friday night and was held at the police investigations department in Asunción, ABC Color reported.

Alliana will serve until August 2028, Última Hora wrote. Peña, 44, took office in August 2023 for a five-year term and could not have stood again in 2028. He was a director of the central bank and then finance minister from 2015 to 2017, according to ANI. A US State Department spokesperson said relations with Paraguay “remain intact”, ANI reported.

Depositors: a $38,000 guarantee, paid in groups

Paraguay’s deposit guarantee fund (FGD) covers up to 75 monthly minimum wages per depositor and per institution, or G. 228.3 million, about $38,000. The BCP’s preliminary estimate is that this fully covers about 97% of Ueno’s depositors, AP reported.

Money is coming back in stages. On the evening of 4 November the BCP announced an advance of up to 40 minimum wages, minus overdue debts to Ueno, to be paid into the depositor’s account at another institution, starting within 24 hours and taking no more than five business days, according to the BCP statements collected by ABC Color. Nothing is paid at a counter.

The first group, announced on the night of 5 November, covered people with deposits of up to G. 10 million (about $1,700), no debts to Ueno and an account at another Paraguayan bank or finance company. On Saturday 7 November the BCP began paying a second group: sight deposits above G. 10 million and up to G. 121.76 million, which is the 40-wage advance, under the same conditions, ABC Color reported. The BCP says the next groups will be announced “soon”, with no date.

Larger balances, debtors and the institutional money, the IPS funds among them, are still waiting. AP gave the legal deadline as 15 days from the takeover, extendable once; Decrypt said a new law requires most deposits to be returned within five business days. The full calendar is not public.

Two smaller measures matter to everyday users. On 4 November the BCP freed the payment aliases (ID number, tax number, phone or email) that Ueno clients used on the national instant payment system, so they can be linked to accounts at other banks. Mutual funds tied to Ueno had their redemptions suspended by the securities regulator and were due to reopen gradually from 5 November; ABC Color notes these funds hold their own assets, separate from the bank.

The guaraní lost about 10% while bitcoin’s P2P premium stayed near 1.7%

The sharpest market move was in the currency. The retail dollar went from 5,900 guaraníes on 30 October to 6,500 on 5 November, a rise of about 10.2%, according to ABC Color figures cited by CryptoSlate. The BCP’s reference rate was 6,144.02 on 4 November.

Bond investors also marked Paraguay down. The country’s EMBI spread, the extra yield over US Treasuries, rose from 125 basis points on 2 November to 137 on 4 November, then touched 157 during 5 November before closing at 143, ABC Color reported. That put Paraguay level with Panama (143), above Uruguay (85), Chile (104) and Peru (121), and below Brazil (202). Fitch rates the country BB+; Moody’s and S&P have it at the lowest investment-grade step, so one more notch down from either would take it below investment grade with that agency.

Against that, crypto prices moved little. The figures, with their sources:

The bitcoin reading comes from one outlet and one platform, and neither CriptoNoticias nor CryptoSlate gives the hour at which it was taken. Treat it as indicative. For reference, bitcoin traded near $75,950 at 07:16 UTC on Saturday 7 November.

The USDT numbers are better documented. CriptoNoticias, using a review of Binance P2P ads by Criptoinforme, found a median of about 6,399 guaraníes on 5 November. Bybit ads went as high as 6,943, about 13% above the official rate, but the outlet describes those as one-off offers, not the going price. CryptoSlate added that the USDT premium narrowed sharply as the official rate caught up with the guaraní’s fall.

Paraguay’s bank crisis and bitcoin: buyers paid extra for dollars

A premium on USDT is mainly a premium on dollars. When a bank freezes accounts and the local currency slides, people who need dollars outside the banking system pay more for whatever gets them dollars quickly, and a dollar stablecoin bought from another person on a P2P market is one of those routes. CriptoNoticias framed the extra 3% to 4% as the cost of that urgency. Our guide to stablecoins as dollar access in emerging markets explains how these P2P markets work and what they cost.

Bitcoin’s 1.7% is smaller than the USDT premium, which fits that reading. Google searches for bitcoin in Paraguay rose from 23 October and peaked on 30 October, before the closure was formally announced, CryptoSlate said; searches for the US dollar rose too. We found no exchange flow data, no on-chain data and no verified P2P volume for Paraguay in any source, so there is no basis for saying that savers moved into bitcoin in size.

Brazil saw something similar on 26 October, when the real was priced about 10% lower in Sunday futures after the election and USDT reached R$5.42 while the spot market was shut. In both cases the stablecoin price worked as a quote for the dollar while normal channels were closed or under strain.

Paraguay mines far more bitcoin than it uses

The country’s stronger link to bitcoin is on the supply side. Paraguay accounted for about 4.3% of global hashrate, around 43 EH/s, in the second quarter of 2026, according to Hashrate Index. HIVE Digital alone runs 18.87 EH/s at two sites, Yguazú (12.15 EH/s) and Valenzuela (6.72 EH/s).

The draw is hydropower. Itaipú, the dam Paraguay shares with Brazil, has 14,000 MW of capacity, and Paraguay’s half, about 7,000 MW, covers roughly 86% of the country’s total demand, Hashrate Index said. Industrial power that cost about $0.03 per kWh in 2021 and 2022 now costs $0.051 at medium tension and has moved closer to $0.06.

Miners buy that power from ANDE, the state utility whose funds were reportedly also frozen at Ueno. In 2023 ANDE placed 150 MW with international blockchain and earns a reward, which makes rewriting history very expensive.">mining companies, 100 MW at the Yguazú substation and 50 MW at Paso Pe, at about $0.039 per kWh before VAT, Última Hora reported then; Bitfarms publicised the contracts on its website. ANDE’s mining contracts run until 31 December 2027. The same state whose pension fund had money stuck in a failing bank sells cheap electricity to bitcoin miners. Nothing in our sources links the two; they share only the public owner.

For miners, the question is whether a new government changes power policy before those contracts end. Elsewhere, some large miners are already turning machines over to AI work: IREN and Core Scientific have set year-end dates to leave bitcoin mining. Power prices weigh on that choice everywhere, Paraguay included.

Bitcoin advocates cited Paraguay; the numbers show a small move

Industry figures took up the crisis within hours. “Bitcoin matters now more than ever. Look at Paraguay today,” Aave founder Stani Kulechov wrote, according to Decrypt. JAN3 founder Samson Mow said that bitcoin adoption at the level of a state “can mitigate these types of situations”, Decrypt reported; CryptoSlate added that he said JAN3 had met Paraguay’s central bank years earlier. Ava Labs founder Emin Gün Sirer wrote that no one can take or freeze coins such as AVAX or bitcoin without the owner’s consent, CryptoSlate said.

Those are opinions. The measured data so far is a premium of a few percent on P2P platforms, larger for dollars than for bitcoin, in a country where a frozen digital bank held the savings of most adults. The idea of bitcoin as money outside banks goes back to its first block, which carried a headline about the 2008 bank bailouts, as told in our guide to the genesis block and the 2008 crisis. In Paraguay’s first week, no data shows that idea at work on a large scale.

What comes next: Peña’s statement, more payouts and a strike on 9 November

• Saturday 7 November, 11:00 local time (14:00 UTC): Peña is due at the public prosecutor’s office, according to Infobae. Prosecutors have not yet said whether they will charge him or seek pre-trial measures.
• Monday 9 November: the Federation of Educators of Paraguay has called a national strike and march, according to Decrypt.
• The BCP will announce the next groups of Ueno depositors to be paid; no dates have been given.
• Ratings: IIF economist Jonathan Fortun, quoted by Bloomberg Línea and cited by ABC Color, said Paraguay’s outlook could turn negative if the cost of the resolution means new debt, if the deficit target of 1.5% of GDP slips beyond 2028, or if the political transition gets complicated.

Still unknown: the size of the hole in Ueno’s balance sheet, the final cost to the state, and whether the IPS and ANDE money comes back in full. ANDE’s power contracts with miners expire on 31 December 2027.