In brief
Santiago Peña resigned Thursday after the fate of Ueno Bank triggered a national crisis. The Central Bank has initiated resolution proceedings for the lender, and 35 lawmakers have filed an impeachment proposal for Peña and Vice President Pedro Alliana. The move follows accusations of conflict of interest and calls from both parties and protesters for the president’s removal.
President Santiago Peña announced his resignation on Thursday, citing the need to safeguard national stability amid mounting pressure over the collapse of digital lender Ueno Bank, a move that has set the stage for a parliamentary impeachment fight and a sweeping banking crisis. The resignation came after a wave of protests and a petition by 35 lawmakers to launch impeachment proceedings against Peña and his vice president, Pedro Alliana, as meticulous investigations revealed that the bank had fallen well short of required solvency ratios and that Peña had previously held shares in its parent company, Ueno Holding.
In a video taped to X, Peña said, "I have decided to submit my resignation as president of the republic," he added, stressing the desire to preserve the country’s democratic institutions. The video was posted on Thursday, the same day that Paraguay’s central bank announced it was formally intervening in Ueno Bank after finding its solvency ratio had dropped below half the mandatory threshold.
Earlier on Thursday, former President Horacio Cartes—Peña’s political mentor and long‑time ally in the ruling Colorado Party—publicly endorsed the impeachment motion, further eroding the president’s core support base from his own party. Following the resignation, central bank chief Carlos Carvallo stepped down at Peña’s request, and prosecutors ordered the arrest of eight former Ueno Bank executives, all of whom were subsequently detained, local media reported.
Background: The Rise and Fall of Ueno Bank
Ueno Bank had been a niche fintech player that grew into a mid‑tier bank, administering significant public funds—approaching $850 million in public money—as of 2026. Its customer base swelled to nearly 3 million, representing about half of Paraguay’s total population. The lender’s rapid expansion was framed by a vision to bring digital banking services to underserved rural regions, yet reports began emerging that the institution was violating regulatory solvency standards.
Peña’s previous stake in Ueno Holding, maintained until 2025, has surfaced as a central point of contention. Lawmakers allege that his interest conflicts with his duty as head of state, and accusations of a cover‑up of the bank’s financial instability have been leveled by opposition figures as well as some within his own party. «He is accused of negligence at the very least and complicity in covering up the fact that the bank was insolvent,» said Al Jazeera’s Latin America editor Lucia Newman, citing the intensifying debate in Congress.
Following the intervention, the bank’s applications and debit cards ceased functioning, and customers found themselves unable to withdraw from ATMs or perform any transactions, resulting in nationwide protests demanding the return of their deposits and a full investigation into the management of the bank.
Political Fallout and Congressional Action
With the government’s crisis deepening, 35 lawmakers submitted a proposal to initiate impeachment proceedings against Peña and Alliana Wednesday. The motion is rooted in accusations that Peña misused public pension funds, allegedly funneled into Ueno Holding, and that he covered up the bank’s insolvency prior to its collapse. The impeachment proposal is now a session of Congress, where representatives are debating whether to proceed with formal charges or accept the president’s resignation. The legal process is not yet concluded; the Supreme Court has been asked to review the constitutionality of potential impeachment of the vice president concurrently.
Vice President Pedro Alliana is slated to assume the presidency on September 8, 2026, according to the Paraguayan constitution. However, his succession has become a source of uncertainty, as a significant faction of the public, including protesters chanting for accountability, insists the impeachment should remain active even after the resignation. «As I speak, there are people outside urging congress not to accept the resignation of the president because they say that they want him tried and impeached,» Newman reported.
Economic and Social Impact
The crisis has been described as the greatest banking collapse in Paraguay’s history, affecting approximately 3 million customers and threatening the stability of the national financial system. The Central Bank’s resolution proceedings aim to preserve depositors’ funds through the deposit guarantee fund, but how and when those funds will be returned remains unclear. Peña, in his resignation address, expressed his greatest wish that “the return of those funds be guaranteed, that the deposit guarantee fund fulfill its purpose, and that public funds and the resources that belong to all Paraguayans – be protected.”
Economic analysts point to a burgeoning risk of a credit crisis. With the country’s private sector sharply reduced in confidence, several companies are now seeking to postpone investments, and the government has warned that the pensions system could be strained further. The concentration of public funds within a single digital bank was described by Al Jazeera as a “significant risk factor” that accelerated the spread of the shock when Ueno Bank failed to meet regulatory solvency requirements.
Open Questions and Ongoing Inquiries
Key questions remain: Who was responsible for the initial decision to convert Ueno Bank from a fintech to a fully regulated financial institution? Was the government’s regulatory framework sufficient to detect the bank’s rapid deterioration? What are the legal grounds for holding the president and vice president accountable for a private bank’s failure? The Constitutional Court has yet to issue a ruling on whether the impeachment motion can remain active after the resignation, and whether the public will have a say in the next administrative transition.
While the investigative press has begun probing the alleged conflict of interest surrounding Peña’s prior holdings in Ueno Holding, no formal statements have yet come from Ueno Bank itself. The bank’s lack of public commentary on the crisis has deepened suspicions of hidden malfeasance. The next steps in the political process will involve a reply from the Senate, possible affirmation of the impeachment process, and a future governmental review of the regulatory oversight of digital lenders in Paraguay.
With Sevilla’s resignations and the central bank stepping in, Paraguayan citizens are left uncertain about the pace of bank resolution and the protection of their deposits. The crisis has served as a stark reminder of the importance of robust regulatory oversight, the need for proper safeguards in the banking sector, and the balance between political decisions and economic stability.
