In brief
Santiago Peña resigned as Paraguay’s president after the digital bank Ueno collapsed, leaving almost 3 million customers unable to access their accounts. Lawmakers filed impeachment petitions while the central bank sealed the bank’s assets, and the president’s former stake in the holding company was cited as a conflict of interest. Vice President Pedro Alliana is set to inherit the presidency amid calls to hold Peña accountable.
Paraguay’s president, Santiago Peña, announced his resignation on Thursday, November 5, 2026, after the sudden collapse of the digital lender Ueno Bank triggered widespread protests and a formal impeachment motion. The collapse left nearly three million customers—about half the country’s population—unable to access their accounts, triggering a political and financial crisis that has dominated the national news cycle.
Ueno Bank, once a niche fintech venture, had grown rapidly into a mid‑tier financial institution administering close to $850 million in public funds. The Paraguayan central bank declared that Ueno’s solvency ratio had fallen to less than half the required minimum, a key measure of a bank’s ability to cover its debts with its assets. In response, the central bank entered resolution proceedings, halting all card and application services and seizing the bank’s remaining assets. With roughly 3 million customers in a 6.5‑million‑strong nation, the failure has created an urgent need for a deposit guarantee fund to restore public trust.
On Wednesday, a group of 35 lawmakers submitted a proposal to initiate impeachment proceedings against Peña and Vice President Pedro Alliana. They accused the president of conflicts of interest, claiming that his former stake in Ueno Holding—and his role in oversight until 2025—had influenced the bank’s expansion. In a statement, Al Jazeera’s Latin America editor Lucia Newman noted that “He is accused of negligence at the very least and complicity in covering up the fact that the bank was insolvent.” The opposition further alleged misuse of pension funds and institutional cover‑ups linked to Ueno’s demise, adding fuel to the impeachment debate.
Political pressure intensified when former president Horacio Cartes, a long‑time mentor of Peña and leader of the ruling Colorado Party, publicly endorsed the impeachment motion. Peña’s own party lost crucial backing on Thursday, with reports of several legislators publicly withdrawing their support. The convergence of legal, political, and social pressure led Peña to release a video addressed to the nation, in which he said: “I have decided to submit my resignation as president of the republic.” He added, “I do so with the stability of our country, social peace and the need to preserve our democratic institutions in mind.” In that same address, Peña expressed his hope that the “return of those funds be guaranteed, that the deposit guarantee fund fulfill its purpose, and that public funds – as well as the resources that belong to all Paraguayans – be protected.”
In the wake of the bank’s collapse, the central bank’s chief, Carlos Carvallo, resigned at Peña’s request, further indicating the depth of the crisis. Prosecutors ordered the arrest of eight Ueno Bank executives; local media reported that all were subsequently detained. The combination of executive resignations and legal actions underscores the severity of the situation and the perceived systemic risk posed by Ueno’s collapse.
With the president’s resignation, the Paraguayan constitution designates the vice president to ascend the presidency. Vice President Pedro Alliana is therefore set to take office, though his own name has been implicated in the impeachment motion. The transition marks the first time in the country’s recent history that a president has stepped down under such intensive scrutiny, and Alliana’s mandate will now be tested against the backdrop of a fragile banking system and a population demanding swift resolution of the deposit crisis.
As the impeachment process unfolds and the central bank works to recover depositors’ funds, Paraguay faces a critical juncture in restoring confidence in its digital financial ecosystem. The case underscores the importance of robust oversight mechanisms and transparent governance for fintech institutions that operate in emerging markets where regulatory frameworks are still evolving.
