Paraguay's President Santiago Peña Resigns as Collapse of Digital Bank ueno Triggers Political Crisis
Key Takeaways
- •President Santiago Peña resigned just hours before lawmakers advanced impeachment proceedings, having lost the support of his own Colorado Party.
- •Paraguay's central bank intervened in ueno earlier in the week over breached minimum solvency requirements, a fallout that forced out the central bank chief and led to arrest warrants for eight ueno executives.
- •Ueno served around 3 million customers in a country of 6.5 million people and administered roughly $850 million in public funds, including money tied to state institutions and pensions.
- •Following the resignation, sovereign bond prices fell and the guarani weakened nearly 5% against the dollar, closing at 6,490 per dollar.
- •Opposition lawmakers accused Peña of conflicts of interest and misuse of pension funds, allegations he denies, while Vice President Pedro Alliana has paused his own presidential ambitions until the crisis is resolved.
ASUNCION — Paraguayan President Santiago Peña resigned on Thursday after the collapse of digital lender ueno triggered a political and financial crisis, freezing access to millions of accounts and rattling investor confidence in one of South America's most stable economies.
The resignation came just hours before lawmakers moved ahead with impeachment proceedings, after Mr. Peña lost the support of his own conservative Colorado Party.
Resignation statement
In a statement on social media, Mr. Peña said he would appear before the Senate's impeachment proceedings to “exercise my right to a defense,” doing 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.
Market reaction
Sovereign bond prices fell after Mr. 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.
How the crisis unfolded
The turmoil began earlier this week, when 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.
The bank's collapse has left customers unable to access their accounts and created acute political pressure, because many Paraguayans relied on ueno for savings, payments and benefits.
Accusations and denials
Opposition lawmakers accused Mr. Peña of conflicts of interest, misuse of pension funds and helping shield the bank from scrutiny. Mr. 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 his 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 added, also accusing Vice President Pedro Alliana of involvement.
Mr. Alliana, next in line for the presidency, has distanced himself from Mr. Peña in recent days and said he was pausing his own presidential ambitions until the financial crisis is resolved.
— Reuters
