In brief
President Santiago Peña asked Central Bank President Carlos Carvallo to resign following a criminal inquiry into the digital lender Ueno. The move comes as depositors protest, a resolution is sought to protect funds, and the government fast‑tracks legislation to use the national Guarantee Fund for affected customers. Carvallo will keep his post during the resolution, pledging to let the bank’s offices function without political distraction.
In Asunción on Tuesday, 3 November 2026, Paraguay’s President Santiago Peña asked Central Bank President Carlos Carvallo to step down after prosecutors opened resolution proceedings against the digital lender Ueno.
Peña said the decision was driven by “facts that emerged throughout the day”. He did not name specifics but highlighted the growing scrutiny over Ueno’s operations. The prosecutor’s office simultaneously requested a criminal investigation and ordered the arrests of eight people linked to the bank.
Ueno, a majority‑owned subsidiary of Grupo Vázquez, serves about 3 million customers and manages roughly US$850 million of public funds. The fintech‑turned‑mid‑tier bank has been criticised by lawmakers for its rapid expansion and its oversight relationship with the central bank.
Carvallo, who ran Ueno until August 2023, was appointed to the head of the Central Bank by Peña. He has long claimed that his work at the bank ran parallel to his public duties, a point that has attracted scrutiny due to Peña’s past partnership with the group owning the lender until March 2025.
After the resignation announcement, Carvallo told a press conference that he would remain in office while the resolution proceedings against Ueno continued. “Stepping aside will help to quell the controversy surrounding the BCP,” he said. He added that his stay would allow the central bank and the banking superintendent’s office to “carry out their work without political and media disputes distracting them.”
The move comes amid scenes of protest outside closed Ueno branches. Manuel Cáceres, a pensioner from Ñemby on the outskirts of Asunción, told reporters that “[i]nvesting money there, you’re left in the dark.” “We’re demanding access to money we have here at Ueno bank,” he said, adding that he and other customers were “spending the morning like this.”
To support depositors, Peña announced an agreement with congressional leaders to fast‑track a bill authorising the use of the national Guarantee Fund. The legislation would also guarantee the return of public funds held by the IPS social‑security institute and other public pension funds.
Meanwhile, the resolution proceedings are aimed at protecting depositors and preserving financial stability. The prosecutor’s office will oversee the process, which could see the government mitigate losses and potentially restructure Ueno’s assets.
Late Tuesday, Carvallo confirmed that he had signed the resignation letter, citing the need for stability as the crisis deepened. The Central Bank’s decision to let Carvallo stay in place during the proceedings creates an unusual arrangement that experts say could help navigate the legal and financial fallout while avoiding further turmoil.
With the crisis unfolding, Paraguay’s reputation as an emerging investment destination is under strain. Many foreign investors rely on the country’s growing financial sector, especially from neighbouring Brazil, and have expressed concern over the implications of a digital lender failure and the central bank’s recent turbulence.
