The banking system in Paraguay: from the Middle Ages straight into the future?
Paraguay, a country in the heart of South America, has seen significant changes in its banking sector in recent years. Many of us who came to Paraguay a few years ago have experienced an emerging country. It felt like Czechoslovakia in the 1990s. I mean, not really; Asuncion was already safe back then (at least the better neighborhoods) and had excellent restaurants, accommodations, and super nomad-friendly prices. You could feel the potential. There were the first cafes of the third coffee wave with specialty coffee. Lately, Asuncion has been going up rapidly. There’s new construction, new options, new services.
I once had the lady at the bank’s “concierge” desk give me a 5-page form to fill out, and they needed me to provide tax reports and employment confirmation. I turned around and walked away. Now, you can set up a bank account (at least a “basic” one) via an app like in Europe. One example of this transformation is Ueno Bank. All you need to open an account is a Paraguayan cedula (“civic”) and a Paraguayan phone number (also obtainable remotely; we can help Liberation.Travel clients with choosing an operator and contacting the ESIM card remotely).
Ueno bank: paraguayan-style digital banking
Ueno represents a new generation of banks in Paraguay that focuses on simplicity and accessibility:
- Easy account opening: You can open an account directly through the mobile app with your national ID (Cedula).
- Immediate access to payment instruments – Virtual Debit Card (Mastercard) is available immediately after account opening.
- Innovative access to physical cards—You can obtain a physical card at self-service machines located in branches Ueno (e.g., in shopping malls) by scanning a QR code and signing the document.
Getting a physical card is an enjoyable experience. You scan a QR code, sign your name, and insert the “contract” (a check-sized piece of paper) into the deposit machine, where the system automatically scans it. Then, you scan the QR code displayed on the screen of the card-vending machine, and your card drops out (you choose the color). You open the package, and there’s the card. Now, you scan the card’s QR code to set the PIN and activate it. Since the bank is green, you get a piece of paper with seeds to plant flowers. By the way, the card is both a credit and debit card (it has two numbers). You have to activate the credit card (which will probably take some bureaucracy), but you only have one physical card for both functions.
Ueno is not the only bank going digital in Paraguay. Similarly, you can onboard to Itaú Bank with an app, although getting a card involves applying and waiting.
QR payments in the Paraguayan banking system
QR code payments are growing in popularity in Paraguay for several reasons:
- Financial sovereignty – The system reduces dependence on foreign payment networks as transactions occur within the domestic system.
- Benefits for merchants – Merchants receive payments faster than credit cards, often with lower fees.
Regulatory specificities of Paraguayan banking
Paraguay has some interesting characteristics in terms of regulation:
- Limited international reporting – Paraguay’s banking system is not integrated into the CRS system (Common Reporting Standard), which means limited automatic exchange of financial information with other countries.
- Limits on bank accounts – Basic accounts with no proof of income are often subject to limits (for example, US$1,000 in the case of Ueno), which serves as an anti-money laundering measure.
Start now!
In Paraguay and many American countries, you notice the barriers you have “back home” immediately. Imagine you have a great business idea. How quickly can you try it out, that is, how quickly can you receive money for it?
You must go to the licensing office or the European commercial register. You can open a bank account once your business or individual entrepreneur license is registered. Although, in theory, you can also use a personal account to do business as a sole trader, many banks don’t like to see that and will close your account; they have terms and conditions that say it is not for business.
In Paraguay, you don’t need a trade license for most jobs; you issue an invoice, and your customers pay you for it in your account by instant payment or cash. Everything is legal. Paraguayans can even take advantage of opportunities that are one-off this way.
During the pandemic, for example, there was a crowdfunding for medical equipment. Part of the project plan was for someone to supply a legal entity with a bank account. In Paraguay and the Bitcoin world, we don’t wait for anything; we are flexible and address needs immediately without paperwork. Anyone with a smartphone can get started (and with cash, of course, even people without a smartphone).
Integration with the crypto ecosystem
One way to quickly top up your Paraguayan bank account is Binance P2P (manual here). The USDT/PGY pair has the most liquidity. The money is in your account within minutes, and you can have a Mbeju or a steak at your favorite restaurant. Binance P2P is not KYC-free; you need a verified Binance account, but you can also make one with a Paraguayan cedula.
Privacy? Not so fast
Trading user data – Banks such as Ueno and other financial institutions in Paraguay often sell customer data, which raises privacy and data protection issues. That is, the benefit of no international reporting does not necessarily mean that it is a “Swiss account,” as we knew it before the era of FATCA and CRS. Banks often sell clients’ purchasing behavior, although this is not specific to Paraguay (for example, PayPal has over 600 institutions in its terms and conditions with which it can share information – from states to marketing agencies, credit registries, risk, etc.)
The Paraguayan banking system is an interesting mix of traditional practices and modern innovations. Banks such as Ueno are trying to simplify access to financial services through digitalization while the country is balancing integration into the global economic system and maintaining a degree of financial autonomy. This combination creates a unique banking ecosystem that reflects Paraguayan society’s and economy’s specific needs and characteristics.
It’s also good to have this option in reserve. You may want to use it if you don’t want to change your tax residence.
