Paraguay's President Santiago Peña resigns as ueno bank collapse freezes millions of accounts and triggers impeachment
Paraguay's President Santiago Peña has resigned after the collapse of digital lender ueno froze the accounts of about three million people, as prosecutors opened criminal cases against him and Congress moved to impeach him over his links to the bank.
Paraguay's President Santiago Peña resigned on Thursday, bringing down a presidency that had lasted barely three years after the sudden collapse of a digital bank left about three million people unable to reach their money. Peña, 47, announced his decision in a video posted on social media, saying he was stepping aside for the sake of the country's stability, social peace and democratic institutions.
“I have made the decision to submit my resignation from the Presidency of the Republic,” Peña said in the message. “I do so with the stability of our country, social peace, and the need to preserve our public institutions in mind.” He apologised to Paraguayans, adding that it was never his intention to betray the trust they had placed in him.
The resignation came hours before lawmakers were due to press ahead with impeachment proceedings against him, and after he had lost the backing of members of his own conservative Colorado Party. Vice President Pedro Alliana, also of the Colorado Party, is constitutionally in line to succeed him.
The crisis began earlier in the week, when Paraguay's central bank intervened in ueno, a fast-growing digital lender, after finding that its solvency ratio — its capital measured against the risks it carried — had fallen below half of the legal minimum. The central bank seized the bank on Tuesday and announced plans to move customers' accounts, along with whatever assets still held value, to other banks before liquidating what was left. All of ueno's services, from cash withdrawals to debit card payments, were immediately blocked.
The scale of the failure is enormous for a country of about seven million people. Ueno had around three million customers — more than 60 per cent of Paraguay's adults — and administered close to $850 million in public funds, including money from state institutions and pension-related bodies. It was Paraguay's fifth-largest bank by assets, and its collapse froze $850 million in deposits.
The fallout was swift and public. On Wednesday, angry protests swept the capital, Asunción, with demonstrators carrying banners reading “give us our money back” and clashing with riot police. The central bank chief, Carlos Carvallo, resigned on Tuesday; he had previously headed ueno itself. Authorities issued arrest warrants for eight senior ueno executives, including founder Miguel Vázquez and bank president Juan Manuel Gustale, who later turned themselves in.
Peña's own connection to the bank is at the heart of the scandal. The former International Monetary Fund economist, who took office in August 2023, was a shareholder in Grupo Vázquez, the conglomerate that controls ueno, until March 2025, when he said he sold his stake. Ueno says Peña never had a direct relationship with the bank as a shareholder or investor. Opposition lawmakers have accused him of conflict of interest, misuse of pension funds and helping to shield the bank from scrutiny — charges he denies.
The legal pressure mounted on Thursday alongside the political pressure. Paraguay's Attorney General, Emiliano Rolón Fernández, opened three criminal cases against Peña and other former officials to investigate the supervision and resolution of ueno, the placement of public funds in the bank, and the actions of authorities from different state institutions. Prosecutors said Peña was among those being investigated, though he had not been taken in for questioning.
Congress moved at the same speed. The lower house voted unanimously to trigger impeachment proceedings, accusing Peña of “serious and systematic dereliction of duty” in connection with his dealings with the bank, after 35 opposition lawmakers and ruling-party dissidents brought charges. The Senate announced it would start an impeachment trial, which began on Thursday night and was expected to continue on Friday. Peña said he would present himself at the trial and defend himself “with arguments and evidence, with respect for the Constitution and the institutions of the Republic.”
The financial damage was visible in the markets on Thursday. Sovereign bond prices fell after the resignation was announced, while Paraguay's guarani currency weakened past 6,500 per US dollar before closing at 6,490, down nearly 5 per cent on the day. The turmoil rattled investor confidence in an economy long regarded as one of South America's most stable, and in a president who had been one of Washington's closest allies in the region — a key regional ally of US President Donald Trump, whom Peña nominated last year for the Nobel Peace Prize.
What happens next now turns on Congress. Lawmakers were deliberating whether to accept Peña's resignation, which would automatically give him a lifetime Senate seat and immunity, or to forcibly remove him from office, which would open him to prosecution. The Senate impeachment trial continues on Friday, and the transfer of ueno customers' accounts to other banks is still under way, with strains across the banking system already contributing to outages at several banking apps. For the millions of Paraguayans locked out of their savings, the political drama matters less than a simple question: when they will get their money back.
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