Paraguay’s President Resigns After Bank Collapse Freezes Millions of Accounts
Paraguayan President Santiago Peña resigned Thursday as lawmakers prepared to debate his impeachment over his ties to Ueno Bank, a digital lender that collapsed this week and left millions of customers locked out of their savings.
Peña, a 47-year-old former International Monetary Fund economist, lost the backing of his own conservative Colorado Party after its powerful leader, former President Horacio Cartes, withdrew his support. Congress President Basilio Núñez also pulled his support. Both main factions of the party in the lower house had pledged to vote for impeachment.
Thirty-five opposition lawmakers and ruling-party dissidents had filed impeachment articles in the 80-seat Chamber of Deputies. They accuse Peña of conflicts of interest, misuse of pension funds and institutional cover-ups linked to Ueno. Lawmakers also cited two loans Peña received from the bank. Impeachment needed a two-thirds majority in the lower house and another two-thirds vote in the Senate to remove him.
Peña sold his shares in Ueno Holding, the parent company of the bank, in April 2025. The motion questions his 2023 appointment of Carlos Carvallo, who previously chaired Financiera Ueno, as central bank chief. According to the document, the central bank approved the company’s conversion into a bank 83 days after Carvallo took the post.
Ueno served about 2.94 million customers, roughly 60 per cent of Paraguay’s adult population. Paraguay’s central bank seized it on Tuesday after finding that its capital had fallen below half the legal minimum. The bank’s app, card payments and transfers stopped working, and branches closed while depositors lined up outside.
Ueno held about $800 million in public deposits as of last month, roughly a quarter of its total. That includes $355 million belonging to the Social Security Institute, which manages pension and health care funds for most Paraguayan workers, and money from the operators of the country’s hydroelectric dams.
Authorities have detained eight senior executives, including founder Miguel Vázquez and bank president Juan Manuel Gustale. Prosecutors have also charged 27 bank officials and business associates with offences including breach of trust and attempted fraud. Lawyers for several of the detainees said they need time to review the allegations before commenting.
On Wednesday, Peña said in a video message that Paraguay “needs institutions that provide answers and protect our people’s resources.” He promised legislation to “return to every saver what they are entitled to as quickly as possible”, approved emergency payouts and named a new central bank chief. Carvallo resigned at his request.
Hundreds of retirees, depositors, students and workers marched through Asunción on Wednesday, holding signs that read “Give us back our money.” On Thursday, hundreds of Ueno employees and workers from other companies in the bank’s parent group protested outside the Labour Ministry, demanding unpaid wages and severance.
“This is yet another assault on honest, hard-working citizens, people whose small savings are the fruit of years of labour,” said protester Belarmino Balbuena.
The crisis forced Peña to cancel his trip to the Ibero-American summit in Madrid.