Paraguay is confronting escalating financial turmoil centered around Ueno Bank, prompting savers to seek alternative financial instruments. Tether CEO Paolo Ardoino characterized the trend as a “flight to safety” as interest in USDT intensifies.
USDT Gains Notable Value Against Paraguayan Guarani
Samson Mow, a Bitcoin advocate, reported a significant rise in the value of USDT against the Paraguayan guarani. Data reveals that from October 15, when USDT stood at approximately 5,692 guarani, it surged past 6,000 guarani by November 4, marking an increase exceeding 5%.
Paolo Ardoino, CEO of Tether, described the shift towards USDT in Paraguay as a “flight to safety.”
Mow linked the movement to more than just price shifts; it is also connected to individuals seeking protective havens for their assets due to uncertainties within the banking system. Concurrently, the U.S. dollar also gained against the guarani, partially driven by broader currency pressures.
For those monitoring such rapid currency changes, platforms like CryptoAppsy provide real-time graphics and news feeds in a single display. Especially during periods when the gap between USDT and local currency widens quickly, accessing simultaneous price movements and news updates aids in comprehending the situation’s trajectory.
Ueno Bank Crisis Impacts Millions
At the center of the crisis lies Ueno Bank, one of Paraguay’s largest digital lending institutions. The bank reportedly serves around 3 million customers, representing a significant segment of the nation’s adult population.
On November 3, Paraguay’s Central Bank announced the initiation of the liquidation and resolution process for the institution. Authorities stated that Ueno Bank’s capital adequacy ratio had fallen to below half of the minimum threshold, effectively halting its operations and temporarily restricting depositors’ access to their funds.
The Central Bank of Paraguay emphasized that the issue is unique to Ueno Bank and does not affect the country’s banking system as a whole.
The crisis extends beyond individual deposits, bringing public funds retained in Ueno Bank under scrutiny. These include hundreds of millions of dollars belonging to Paraguay’s social security system.
As investigations continue, reports indicate that eight individuals connected to the bank have been detained, and Central Bank President Carlos Carvallo has stepped down. However, for account holders with frozen assets to convert their savings into stablecoins, they must first regain access to their funds.
