Paraguayan President Santiago Peña resigned on Thursday following a deepening crisis surrounding the digital bank Ueno, which has left millions of customers unable to access their savings. The resignation follows the loss of support from his own Colorado Party, including prominent party leader Horacio Cartes and Senate President Basilio Núñez.
Opposition Lawmakers File Impeachment Motion Against Peña
The decision to step down came as the Paraguayan Congress moved closer to an impeachment process. On Wednesday, 35 opposition lawmakers filed a formal motion to remove the president from office. The opposition accused Peña of favoring the digital bank Ueno—a firm in which he held a financial stake—and permitting the deposit of public funds into the institution despite clear legal restrictions.
Under the Paraguayan constitution, Vice President Pedro Alliana is set to take over the presidency. Alliana, also a member of the conservative Colorado Party, is expected to serve out the remainder of Peña’s term, which runs until August 2028.
Crisis at Ueno
The turmoil began after the Central Bank of Paraguay placed Ueno under state control, citing insufficient capital reserves. The bank serves approximately three million customers, many of whom have faced restricted access to their accounts. The crisis has triggered significant public unrest, with thousands of protesters gathering in the capital, Asunción, to demand the release of their frozen funds.
Public institutions are heavily exposed to the bank’s instability. The state social security fund alone holds roughly $355 million at the institution, and the total amount of public money managed by Ueno is estimated at $850 million.
Prosecutors Investigate Bank Executives as Central Bank President Resigns
The Paraguayan public prosecutor’s office has launched an investigation into eight of the bank’s executives. Central Bank President Carlos Carvallo resigned at the request of Peña amid the fallout; Carvallo had previously led Ueno before assuming his position at the central bank in 2023. Reports indicate that Peña remained a business partner of the corporate group that owns Ueno even after taking office as president, maintaining that involvement until 2025.
In an effort to mitigate the financial impact, Peña signed a law on Wednesday intended to facilitate initial payouts to affected customers within five days. The central bank has announced that it will provide payments of up to 10 million Guaraní—approximately 1,300 euros—per customer. Peña has publicly denied that the situation at Ueno indicates a broader collapse of the national banking sector, characterizing the bank’s failure as an isolated event.
Frequently Asked Questions
Who will lead Paraguay following the president’s resignation?
Vice President Pedro Alliana will assume the presidency. He is tasked with completing the current administration’s term, which concludes in August 2028.
How much public money is tied up in the Ueno bank crisis?
The bank manages approximately $850 million in public funds. This includes about $355 million held by the state social security system.
What is the status of the bank’s customers?
Approximately three million customers have been affected by the restrictions on their bank accounts. The government has signed legislation to begin initial disbursements of up to 10 million Guaraní per customer to address the immediate liquidity needs of those impacted.
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