Paraguay’s rightwing president, Santiago Peña, was impeached by Congress and subsequently placed under house arrest following a major banking crisis that affected millions of citizens. The suspension of Ueno bank this week resulted in frozen accounts for approximately 2.9 million people, roughly 60% of the country’s adult population, leaving customers unable to access their funds for basic necessities. The situation triggered widespread protests across the nation, with some demonstrations involving violent confrontations with police.
Peña is under investigation for multiple allegations including illicit enrichment, money laundering, and influence peddling. Authorities indicate the former president allowed officers to enter his residence voluntarily and made himself available for procedural requirements. His vice-president, Pedro Alliana, was sworn in as the new national leader. The ousted president had attempted to resign the previous day to maintain protections afforded to former presidents who become lifetime senators, but lawmakers rejected this maneuver, leaving him subject to ordinary courts.
Investigations have centered on Peña’s appointment of Carlos Carvallo Spalding, a former Ueno CEO, to head the central bank. Spalding subsequently allowed Ueno to transition into a digital bank, enabling rapid expansion that made it one of Paraguay’s largest banks within years. Peña held approximately $1 million in shares in what became Ueno Holding’s parent company, purchasing them in 2019 and only divesting in April 2025. Government pension funds estimated at $800 million to $860 million were directed to the bank, reportedly due to its perceived presidential backing.
As the bank expanded aggressively with an accessible account-opening system and above-market returns, retail sales declined sharply when the population lost access to their deposits. Peña eventually lost support from his own political party amid mounting pressure. During impeachment proceedings, opposition lawmakers characterized the situation as among the most significant corruption scandals since the country’s return to democracy.
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