Paraguay’s president, Santiago Peña, has stepped down following mounting political pressure caused by the collapse of the digital bank Ueno Bank, which left millions of customers unable to reach their accounts.
In a pre-recorded address on Thursday, November 5, Peña stated that he was resigning “to guarantee stability in our country, to preserve social calm and our democratic institutions”.
This comes as legislators get ready to move forward with impeachment proceedings, though Peña’s resignation must still be approved by the Paraguayan Senate.
Millions Left Without Access to Funds After Ueno Bank Collapse
A political scandal erupted after Paraguay’s central bank intervened upon discovering that Ueno, a major digital financial institution, failed to meet minimum solvency requirements.
As a result, the bank was effectively shut down, leaving customers unable to reach their accounts through the mobile app, card payments and fund transfers.
In a nation of roughly 6.5 million people, three million customers were affected. The institution also handled close to $850 million in public funds.
Questions have been raised about the safety of public funds and deposits.
Peña Under Scrutiny Over Past Ties to Grupo Vázquez
Peña has faced intense scrutiny because he previously held shares in Grupo Vázquez, the group that owned Ueno Bank until March 2025.
Opposition lawmakers have accused Peña of conflicts of interest, misuse of pension funds and cover-ups.
Peña has denied any wrongdoing and maintains that the situation began as a technical problem. Any allegations of wrongdoing should be handled through the legal system.
“The first thing we must do is guarantee the security of public funds…Deposit holders must get their money,” he said in his resignation speech.
Mounting Pressure Points Toward Impeachment
Peña has also lost backing from key figures in his own conservative party.
The situation sparked protests in the capital, Asuncion, as deposit holders, pensioners, employees and others demanded their money back.
The lower house voted 78-0 to impeach Peña.
Almost immediately, Peña resigned, and the country now faces an unusual change of leadership.
Eight Senior Executives Taken Into Custody
This situation has prompted an investigation into the bank.
Authorities have arrested eight senior executives, and courts have ordered that their assets be frozen.
Prosecutors have filed charges against bank officials and business partners.
This situation has also harmed Paraguay’s reputation as a stable destination for foreign investment, particularly from neighboring Brazil.
Vice President Pedro Alliana Is Expected to Take Over
It is expected that Vice President Pedro Alliana will assume office.
Nevertheless, the Senate will have a crucial role in approving Peña’s resignation and impeachment.
Peña, who is an economist, was elected president in 2023. He was elected to a five-year term, and his departure is a major setback for the governing conservative Colorado Party.
Paraguay’s immediate challenge will be to restore public confidence in the banking sector and to make sure depositors recover their money. They will also want to understand how such a large financial institution ended up in this situation.