Paraguay bank collapse lifts demand for dollar stablecoins, Cointelegraph reports; sellers asked up to 13% extra for USDT

Demand for dollar stablecoins rose in Paraguay after the central bank placed Ueno Bank, a large digital lender, into resolution on November 3, 2026, and customers lost access to their accounts, Cointelegraph Magazine reported on November 11. Some sellers on the country's peer-to-peer crypto market asked a premium of up to 13% for Tether's USDT, according to the report.

What happened at Ueno Bank

Paraguay's central bank, the Banco Central del Paraguay (BCP), put Ueno into resolution, a procedure for dealing with a failed bank, after its solvency ratio fell below half the legal minimum, according to Cointelegraph. ABC Color, a Paraguayan daily, reports that the BCP began the resolution process on the previous Tuesday, which was November 3, and that customer accounts were frozen.

Ueno had nearly three million customers, about 60% of Paraguay's adults, Cointelegraph reported. By November 9, an advance on the deposit guarantee had reached 1,738,804 people, or 93.1% of the depositors covered by the process, the central bank said, according to La Nación. The payments are partial advances, not a full return of savings.

The failure set off a political crisis. Paraguay's Senate removed the president, Santiago Peña, from office in an impeachment trial on November 6, and a judge ordered him held in pre-trial detention the next day, the news agency EFE reported. Prosecutors have charged him and a former central bank president, Carlos Carvallo, in the Ueno case, the Paraguayan daily La Nación reported. ABC Color, which refers to Peña as the former president, reported on November 11 that prosecutor Verónica Valdez said he is charged with more than one offense and could face a sentence of up to 15 years if convicted. Former executives of the bank could face up to 12 years, prosecutor Francisco Cabrera said, according to the newspaper. Peña declined to testify when questioned by prosecutors, ABC Color reported; the reports we read carry no statement from him or his lawyers. These are charges and prosecutors' statements, not findings of guilt, and they have not been tested at trial.

The BCP has also said that mutual funds linked to Ueno are still not operating while most other mutual funds in the market work normally, ABC Color reported. We could not open the central bank's own website; its statements are given here as Paraguayan and international outlets reported them.

What is known about stablecoin demand

The guaraní fell 12.3% in a week, according to Cointelegraph. David Eisenmann, chief executive of the Paraguayan crypto exchange X4T, told the magazine that the intervention came at the start of the month, when salaries, rent and supplier invoices fall due, and that many business owners "couldn't make payroll."

Eisenmann said activity ran in both directions: some customers sold crypto to cover payments they could no longer make through Ueno, while demand for USDT and Circle's USDC as a store of dollar value rose sharply. He said X4T handled more than $10 million of local purchases in the 30 days to early November, some of it before the collapse. Those are the exchange's own figures, and we could not check them.

Rhys Hicks, an associate analyst at the data company GlobalData, told Cointelegraph that other banks "picked up the slack." "I do not see an overwhelming shift to stablecoins yet," he said.

Why it matters

Cointelegraph set the episode against a paper from the Bank for International Settlements which, it said, warns that wide use of dollar-backed tokens could create challenges for monetary sovereignty in emerging markets. USDT and USDC are issued by Tether and Circle. Separately, the Financial Stability Board has urged Türkiye to set up a stablecoin regime.

What it could mean for traders

Stablecoins carry their own risks. Holders have no deposit insurance and no central bank standing behind them, as Hicks noted to Cointelegraph, and an asking premium of up to 13% means some sellers wanted well above the dollar's value from buyers in a hurry. In our assessment, the evidence so far, most of it from one exchange, shows a spike in demand during a crisis and not a lasting move away from banks.