Paraguay’s President Santiago Peña announced his resignation on Thursday following a severe banking and political crisis that destabilized the South American nation’s financial system. The resignation came after the central bank ordered Ueno Bank into resolution due to insolvency, freezing deposits belonging to approximately 3 million customers and leaving hundreds of thousands of families unable to access funds for essential expenses. The 47-year-old economist, who had served as president since August 2023, addressed the public in a video statement indicating that he was stepping down to prioritize national stability and preserve democratic institutions.
Ueno Bank emerged as a significant player in Paraguay’s financial landscape under Peña’s administration. Originally established as a finance company in the 1970s, the institution was acquired by Grupo Vázquez, a major Paraguayan conglomerate, in 2021. The bank received authorization to operate as a digital lender in late 2023 and subsequently expanded rapidly, attracting customers through promotional offers and sponsorships including Paraguay’s national football team. However, the bank accumulated between $800 million and $850 million in deposits from state and pension entities, raising concerns about potential conflicts of interest given Peña’s previous shareholding ties to the Ueno Holding group.
Peña’s resignation followed mounting political pressure from multiple quarters. Opposition lawmakers and members of his own Colorado party filed an impeachment motion on Wednesday holding the president accountable for the banking collapse. The pressure intensified when former president Horacio Cartes, previously aligned with Peña, publicly endorsed the impeachment effort. Bank executives were arrested following the crisis, and widespread street protests erupted as citizens demanded accountability.
Vice-President Pedro Alliana automatically assumes the presidency to serve until August 2028. Despite Peña’s resignation, the lower house unanimously approved the impeachment motion, which now proceeds to the senate. If approved in that chamber, Peña would lose his senate seat and parliamentary immunity, potentially exposing him to criminal proceedings. Peña had previously served as finance minister and positioned himself as a strategic ally of the United States, attending the second inauguration of President Donald Trump and meeting with Secretary of State Marco Rubio to discuss economic cooperation and critical minerals.
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