Paraguayan President Santiago Peña Resigns Amid Ueno Digital Bank Crisis

Paraguay’s Santiago Peña resigned on November 5, 2026, following a severe banking crisis involving the digital bank Ueno, which was placed under state control. The president’s departure follows a loss of support from his own Colorado Party, including influential party chief Horacio Cartes, leaving Peña facing congressional impeachment.

The political instability stems from the deterioration of Ueno, a digital institution that served approximately three million customers—roughly 60 percent of the nation’s adult population, according to Swissinfo.ch. The bank was placed under state control after its capital ratio fell below 50 percent of the mandatory minimum requirement, freezing access to customer deposits.

The crisis at Ueno

The crisis escalated when thousands of citizens, including pensioners, took to the streets of Asunción to protest the loss of access to their savings. The financial impact is extensive; public institutions hold significant capital within the bank. Swissinfo.ch notes that public entities had deposited approximately 850 million dollars into the institution, including 355 million dollars held by the state social security system.

While Peña initially claimed the issues at Ueno were an isolated incident rather than a systemic failure of the Paraguayan banking sector, his administration faced intense scrutiny regarding potential conflicts of interest. Peña maintained business ties to the parent company of Ueno until March 2025, a connection that fueled opposition claims that he facilitated the placement of public funds in an institution whose ownership group he had previously belonged to.

Political fallout and the transition of power

The pressure on the executive branch became untenable this week. On Wednesday, 35 opposition lawmakers filed a formal motion for impeachment, accusing the president of favoring the bank and ignoring legal restrictions on the investment of public assets. By Thursday, the withdrawal of support from Senate Basilio Núñez signaled that the president’s political survival was no longer viable.

In a televised address, Peña sought to frame his resignation as a necessary step for national stability. Today there is only one priority: the calm of the Paraguayans who have entrusted their savings to our financial system, he stated. He also offered a public apology, saying, I would also like to ask the Paraguayan people for forgiveness if I made a mistake at any moment.

Under the Paraguayan constitution, Pedro Alliana will assume the presidency. Alliana, also a member of the conservative Colorado Party, is tasked with completing the remainder of the term, which runs until August 2028.

Prosecutors investigate Ueno executives amid leadership fallout

The public prosecutor’s office has launched investigations into eight senior executives at Ueno. The fallout has already claimed other high-ranking officials; Central Bank Carlos Carvallo resigned at the request of Peña before the president himself stepped down. Carvallo’s credibility was compromised by his own prior executive role at the digital bank before taking his post at the Central Bank in 2023.

To mitigate the immediate liquidity crisis, Peña signed a law on Wednesday intended to expedite partial payouts to affected customers. The Central Bank has announced that initial disbursements will be capped at ten million Guaraní, or approximately 1,300 euros, per customer within a five-day window.

The crisis has hit Paraguay hard. The country had built a reputation as a stable financial hub in recent years.