Paraguay President Santiago Peña Resigns After Collapse of Digital Bank Ueno

Resignation after bank seizure

Paraguayan President Santiago Peña resigned on November 5 after regulators seized digital lender Ueno Bank, freezing the accounts of roughly three million customers and sparking days of protests in Asunción. Peña announced the decision in a recorded video address, saying he stepped down to protect the country’s stability, social peace and democratic institutions. He added that his priority was protecting depositors affected by the crisis.

The central bank had intervened in Ueno early in the week. The lender held hundreds of millions of dollars in public deposits and served about one in three Paraguayans, including pensioners. Its collapse left large numbers of people unable to withdraw savings, receive wages or access pensions. The guarani fell 5.2 percent, trading near 6,525 to the dollar. Eight Ueno executives were detained. The central bank chief had already resigned.

Political fallout

Minutes after the resignation video, the lower house voted unanimously 78-0 to begin impeachment proceedings against Peña. Lawmakers rejected a parallel motion against Vice President Pedro Alliana, who stands next in the line of succession. The Senate must now decide whether to accept the resignation or pursue formal removal. Peña said he would appear and defend himself in the proceedings.

Peña, an ally of U.S. President Donald Trump, lost support from members of his own conservative party. Critics had long pointed to his previous ownership stake in Ueno’s parent company, Grupo Vázquez, controlled by Paraguay’s richest man, Miguel Vázquez. Peña divested the stake last year. Government deposits at Ueno rose from zero when he took office in 2023 to more than $800 million earlier this year. He also appointed a former Ueno executive to lead the central bank. Opposition figures described the links as a conflict of interest and cited weak oversight of the bank’s rapid growth.

Public reaction and next steps

Thousands of protesters gathered outside Congress for a third day, holding signs that labeled Peña a thief and demanded political judgment. The unrest followed the sudden freeze of accounts that many families use for daily expenses. Alliana has not yet been sworn in; the timing depends on the Senate’s handling of the resignation and the impeachment file.

The crisis began with the failure of a digital lender that had expanded quickly under light regulation. Depositors now wait for clarity on how much of their money can be recovered and how soon. The political transition will determine who manages the cleanup and whether further bank runs or capital flight follow. Peña’s resignation ends his term early but leaves the Senate to decide the formal legal path. The lower house’s unanimous vote shows how quickly his coalition fractured once the accounts were frozen.

Paraguay has seen bank failures before, but few have removed a sitting president within days. The combination of large public deposits, personal links to the lender’s ownership structure, and the immediate freeze of millions of accounts produced a rapid political collapse. The coming days will show whether Alliana can stabilize the financial system or whether the crisis deepens before a new administration takes full control.