The fallout of Ueno Bank’s collapse has quickly spread across the economy, leading to the collapse of Paraguay’s government and the arrest of eight bank executives.

On its founding in 2021, Ueno Bank , a subsidiary of the Vázquez Group, was a small fintech lender that operated almost exclusively through digital payment platforms. The lender did not even receive its banking license until 2023. Yet by 2026, it had grown to become one of Paraguay’s largest banks, with almost 3 million customers.

While that number may sound small by large-country standards, it is equivalent to 60% of Paraguay’s adult population. Hence the reason why the Central Bank of Paraguay’s decision at 3 a.m. on Tuesday morning — while most of the country was sleeping — to place ueno in resolution was so consequential.

That decision left millions of customers’ savings and hundreds of millions of dollars in public pensions and funds in limbo.…