Paraguay President Santiago Peña Resigns After Ueno Bank Collapse Freezes Millions of Accounts

Paraguayan President Santiago Peña resigned on November 5 after the collapse of Ueno Bank triggered the freezing of accounts for approximately 3 million customers, equivalent to nearly half the country's adult population.

The Central Bank of Paraguay intervened in the digital lender on November 3 after determining it had breached minimum solvency requirements. Ueno administered close to $850 million in public funds, including deposits from the Social Security Institute that manages worker pensions. Customers could not access savings or receive pension payments.

Peña announced the resignation in a video address, stating he was stepping down to protect national stability, social peace and democratic institutions. He apologized to the public if he had failed them at any point and said his priority was ensuring the return of funds to depositors. He had previously held a stake in Ueno's parent company, Grupo Vázquez, until March 2025.

Lawmakers had accused the president of conflicts of interest. The lower house of Congress approved an impeachment motion unanimously by a vote of 78 shortly after the resignation announcement. The Senate later rejected the resignation by 24 votes to 20, but members of the ruling Colorado Party walked out, preventing a quorum for further action. Vice President Pedro Alliana is next in the line of succession.

Protests erupted in Asunción. Demonstrators gathered near the Congress building, some carrying signs calling for Peña's arrest. Security forces used tear gas and water cannons in some confrontations. Eight Ueno executives, including founder Miguel Vázquez, were detained. The prosecutor's office charged 27 people in connection with the case and is investigating Peña.

The guarani currency fell 5.2 percent, trading at 6,525 per dollar. The central bank chief, Carlos Carvallo, a former Ueno executive appointed by Peña, had resigned earlier in the week. Government deposits in the bank had grown from zero in 2023 to more than $800 million.

Peña, an economist with a master's degree from Columbia University and an ally of U.S. President Donald Trump, took office in 2023 as a protégé of former president Horacio Cartes. Cartes, who chairs the Colorado Party, supported the president's removal as the crisis deepened. The bank had grown rapidly from a niche fintech operation into a mid-tier institution used by about 60 percent of adults.

Deposit insurance mechanisms are expected to begin paying out to eligible customers, but the scale of frozen accounts has strained other banks as customers seek to open new accounts. Public funds held by Ueno included roughly $380 million from the Social Security Institute.

The events mark a rapid collapse of political support within Peña's own party. The lower house session on impeachment proceeded despite the resignation. Full resolution of the banking crisis and any legal proceedings against the former president remain ongoing.

Paraguay's adult population is approximately 5 million. The bank's 2.8 to 3 million customers mean the disruption affected a majority of households that rely on digital banking for daily expenses, pensions and public payments. The intervention followed a review that found problems with asset quality and related-party lending above permitted limits.