Paraguay’s President Santiago Peña resigns amid a banking crisis that leaves millions unable to access accounts and triggers political turmoil.
Paraguayan President Santiago Peña has resigned following the collapse of digital lender UenoBank, which triggered a banking crisis, protests and calls for his impeachment.
Peña announced his resignation in a recorded video address on Tuesday, saying his decision was guided by the need to protect the country’s stability, social peace and democratic institutions.
The crisis also forced the resignation of Central Bank President Carlos Carvallo, while eight senior Ueno executives, including the bank’s founder and president, were detained as partof an investigation into the collapse.
The bank’s failure left about three million customers, nearly half of Paraguay’s population of 6.5 million, unable to access their accounts.
The development sparked protests, with customers demanding access to their money as opposition lawmakers prepared to begin impeachment proceedings against Peña.
The president’s resignation came amid allegations of conflicts of interest, misuse of pension funds and an institutional cover-up linked to the bank’s collapse.
Peña, an economist elected in 2023, previously held shares in Grupo Vázquez, the business group that owned Ueno Bank until March 2025.
He has repeatedly denied any wrong doing, describing the controversy as the politicisation of what began as a technical and regulatory issue.
He also maintained that allegations of misconducts should be addressed through the courts.
Ueno had grown from a relatively small financial technology company into a mid-tier bank that administered close to $850 million in public funds.
Paraguay’s Central Bank intervened after determining that the lender had breached minimum solvency requirements, triggering the crisis.
Prosecutors issued arrest warrants for eight executives on Tuesday. The executives subsequently surrendered to authorities, while courts ordered their assets frozen as investigations widened. Some were later placed under house arrest.
Ueno has yet to issue a public statement on the crisis.
In his resignation address, Peña called for measures to protect depositors and public funds.
“My greatest wish is that the return of those funds be guaranteed, that the deposit guarantee fund fulfil its purpose, and that public funds– as well as the resources that belong to all Paraguayans be protected.”
The crisis has also raised concerns about Paraguay’s reputation as a stable destination for foreign investment, particularly from neighbouring Brazil.
US investment bank JPMorgan said in a note toclients that the Ueno developments had rapidly acquired a political dimension.
It said the potential impact on the wider financial system would depend on the speed and transparency of the authorities’ response.
Peña’s resignation was expected to be ratified by the Senate, with lawmakers indicating that the process would move quickly to ensure a transition of power.
Congress was scheduled to receive the resignationat 2pm local time, while Vice President Pedro Alliana was expected to be sworn in around 3:30pm.