Paraguay's Peña resigns as bank collapse triggers political crisis

Paraguayan President Santiago Peña resigned on Thursday after the collapse of digital lender ueno triggered a political ‌and financial crisis, froze access to millions of accounts and rattled investor confidence in one of South America's most stable economies. Peña stepped down hours before lawmakers moved ahead with impeachment proceedings, after losing support within his own conservative Colorado Party.

In a statement on social media, Peña said he would appear before Senate impeachment proceedings to "exercise ‌my right to a defense." Peña said he would do so "not out of personal pride, but because being accountable and providing explanations is also a responsibility I ‌owe to the Paraguayan people."

He urged a quick solution for those left unable to access their accounts. "Clarifying the facts and resolving the payments are obligations that must advance at the same time," he said.

Sovereign bond prices fell after Peña's resignation, while Paraguay's guarani currency weakened past 6,500 per dollar before closing at 6,490, down nearly 5% on the day. The turmoil began earlier ⁠this week ​after Paraguay's central bank intervened in ueno, saying ⁠the fast-growing digital bank had breached minimum solvency requirements. The fallout has already forced out the central bank chief and led to arrest warrants for eight ueno executives, who later turned themselves in.

Ueno ⁠had grown from a niche fintech into a mid-sized bank serving around 3 million customers in a country of 6.5 million people. It also administered roughly $850 million in public funds, ​including money linked to state institutions and pensions. Its collapse has left customers unable to access accounts and raised acute political pressure because many ⁠Paraguayans relied on the bank for savings, payments and benefits.

Opposition lawmakers accused Peña of conflicts of interest, misuse of pension funds and helping shield the bank from scrutiny. Peña has denied wrongdoing and ⁠said ​the affair was a regulatory issue that should be handled by the courts. The president, elected in 2023, has faced intense scrutiny over past ties to Grupo Vazquez, the business group that owned ueno until March 2025. He has said he sold his stake in the group that month and had no ⁠improper role in the bank's affairs.

"Peña is playing with savers' money," ueno account holder Felipe Rodriguez said, choking up. "This cannot go unpunished," he said, also accusing ⁠Vice President Pedro Alliana of involvement. Alliana, next ⁠in line for the presidency, has distanced himself from Peña in recent days and said he was pausing his own presidential ambitions until the financial crisis was resolved.