Paraguayan President Impeached After Digital Bank Collapse
Lawmakers voted 78-0 to remove Santiago Peña from office following the seizure of Ueno Bank, a digital lender holding $800 million in public funds.
By Renata Mehta ·
Paraguay's lower house voted unanimously on Thursday to impeach President Santiago Peña minutes after he announced his resignation. The 78-0 vote sends the charges to the Senate, where a two-thirds majority is required to formally remove him from office. This action ended a political crisis triggered by the collapse of Ueno Bank, a major digital lender tied to Peña's government.
The bank's failure left millions of people unable to access their savings, wages, and pensions. Ueno claimed more than 60% of Paraguay's adults as customers. As of last month, the institution held roughly $800 million in public deposits, which accounted for about a quarter of its total. These funds included money from the state pension and health fund as well as operators of the country's giant hydroelectric dams.
Peña, a close ally of U.S. President Donald Trump, posted a video to X while lawmakers debated his fate. He stated he was stepping down for the stability of the country and to preserve democratic institutions. He also apologized to the people, saying it was never his intention to betray their trust. Until last year, Peña held a stake in a company related to Ueno Bank. He appointed Carlos Carvallo, president of Ueno's predecessor, to run the central bank.
Regulators found Ueno had engaged in risky lending to insider companies beyond legal limits. On a single day in September 2025, nearly $39 million went to three such firms. After correcting the books, the bank's capital fell to less than half the legal minimum. The central bank seized the lender on Tuesday and plans to move customer accounts to other banks before liquidating remaining assets.
Officials said they have begun repaying depositors and opened new accounts for about 280,000 people who banked only with Ueno. Pedro Acosta Bernal, who became interim central bank president Wednesday, insisted the banking system is sound. Authorities detained eight senior executives, including founder Miguel Vázquez and bank President Juan Manuel Gustale. Prosecutors charged 27 officials and associates with breach of trust and attempted fraud.
Protests continued in Asunción for a third day. Hundreds of Ueno employees and retirees marched to Congress, demanding unpaid wages and their money back. Riot police used pepper spray and rubber pellets to manage the crowds. Congress is expected to formally accept Peña's resignation at 5 p.m., clearing the way for Vice President Pedro Alliana to be sworn in as president an hour later. Alliana will serve out the term through August 2028.
