Tether CEO Paolo Ardoino addressed reports of a sharp increase in demand for the company’s stablecoin, USDT, in Paraguay following the recent failure of Ueno Bank, which left millions without access to their funds. Ardoino characterized the shift as a “flight to safety” in response to the banking crisis.
Ueno Bank collapse drives stablecoin surge
Bitcoin advocate Samson Mow highlighted that USDT has appreciated notably against the Paraguayan guaraní amid the turmoil. According to his observations on X, the value of USDT rose from 5,692 guaraníes to over 6,000, marking an increase of more than 5% since mid-October.
This surge follows the collapse of Ueno Bank, one of Paraguay’s largest digital lenders, which served an estimated 3 million customers. The crisis emerged when Paraguay’s central bank identified that Ueno Bank’s solvency ratio had fallen below half the required minimum, prompting immediate regulatory intervention.
Mow attributed the growing interest in USDT to a desire among Paraguayans to protect their assets outside the traditional financial system, as confidence in local banks was shaken by the sudden halt in banking operations.
USDT’s rising value, surpassing 6,000 guaraníes, reflects increasing demand as Paraguayans look for alternatives amid the ongoing banking crisis, according to Samson Mow.
Throughout the crisis, the U.S. dollar also gained against the guaraní, further contributing to outflows from local currency into dollar-linked options.
| Date | USDT/Guaraní exchange rate |
|---|---|
| October 15 | 5,692 |
| November 4 | 6,000+ |
Regulatory response and public fallout
Paraguay’s central bank initiated resolution proceedings for Ueno Bank on November 3 after uncovering the severe shortfall in solvency. The action effectively suspended the bank’s operations, leaving customers unable to access their deposits or regular banking services temporarily.
Public funds have also been impacted, as Ueno Bank was holding hundreds of millions of dollars connected to the country’s social security system. The situation has intensified public concern regarding the stability of financial institutions in Paraguay.
The aftermath saw the arrest of eight individuals connected to Ueno Bank and the resignation of central bank president Carlos Carvallo. Despite these moves, the central bank has stated that the crisis is confined to Ueno Bank and does not signal a systemic banking collapse.
Paolo Ardoino emphasized that many Paraguayan customers are seeking safe havens like USDT. However, depositors with frozen funds at Ueno Bank cannot access or convert their balances into stablecoins until official restrictions are lifted.
Mini dictionary: Ueno Bank, one of Paraguay’s primary digital banks, provided financial services to millions of local customers before its operations were halted due to solvency issues in November.
Authorities are working to reassure the public, asserting that the problems at Ueno Bank are not reflective of broader instability in Paraguay’s banking sector.
Despite official reassurances, the sharp turn to stablecoins like USDT underscores lingering financial insecurity among many Paraguayans.
