Pedro Alliana assumes the presidency as the lower house unanimously approves impeachment
Paraguay’s president Santiago Peña resigned on Thursday after a political and financial crisis collapsed the South American country’s banking system in recent days, freezing the savings of 3 million customers of the failed Ueno Bank.
“Dear compatriots, today I address you at one of the most difficult moments of my life,” Peña said in a video. “With my heart set on Paraguay and with the conviction that our republic must always come before any person or circumstance, I have decided to submit my resignation as president of the republic.”
“I do so thinking of the stability of our country, social peace and the need to preserve our democratic institutions,” said the now former president. “I also want to apologise to the people if at any point I failed them,” he added. “But today my priority is only one thing: the peace of mind of Paraguayans who trusted their savings to our financial system. My greatest wish is that the return of those funds is guaranteed,” he said.
The crisis centers on Ueno Bank, which in just a few years under Peña went from an obscure digital bank to one of the country’s largest lenders, claiming to have about 60% of Paraguay’s adult population as customers. On Monday, the central bank ordered Ueno into resolution over insolvency, freezing the deposits of 3 million customers and leaving hundreds of thousands of families without access to money for food and basic daily expenses. Bank executives were arrested, and people took to the streets in massive protests.
Ueno began as a finance company in the 1970s and in 2021 was bought by Grupo Vázquez, one of Paraguay’s largest business and industrial conglomerates. At the end of 2023, it received authorization from the central bank, already under Peña’s administration, to operate as a digital bank. The bank then expanded rapidly, attracting customers with generous cash-back offers on groceries and sponsoring Paraguay’s national football team. On Wednesday, the players released a letter “demanding” a “forceful response” from the government and the justice system.
The bank came to manage between $800m and $850m in deposits from state and pension entities, including retirement funds, prompting criticism over conflicts of interest because of Peña’s previous shareholding ties to Ueno Holding. Peña said that, as an economist, he had merely made an “investment” and had already disposed of all his shares. When the local press pointed to possible improper favoritism in directing state and pension funds to the bank, he called it a “false media campaign” aimed at weakening his government. He had been a shareholder in the group that ran the bank until early last year and, in recent months, had reportedly been ignoring warnings from the central bank and the media about its operations.
On Wednesday, opposition lawmakers and even members of Peña’s own Colorado party filed an impeachment motion holding the president responsible for the collapse. The 47-year-old economist had been in power since August 2023, with a term running until 2028, and was already facing impeachment proceedings that had broad support.
Political pressure intensified on Thursday morning when Horacio Cartes, the ex-president and Peña’s former ally, posted a message endorsing the impeachment. “We will not stand on the side of the theft of public, private and pensioners’ funds,” Cartes wrote. “We support the impeachment of the president of the republic, Santiago Peña, in order to restore the institutional order of the republic.”
Other lawmakers followed suit, and they had begun debating impeachment when Peña released the video announcing his resignation. Opposition senator Rafael Filizzola called the case “the biggest fraud carried out from political power in the democratic era.” “This is a bank created from political power, to use public money for private businesses linked to political power, with the president of the republic at the head of it,” Filizzola told 1020 AM radio.
About an hour after Peña’s announcement, Paraguay’s lower house unanimously approved the impeachment motion, which now goes to the senate. If the senate approves it, even after his resignation, Peña would lose his senate seat and, with it, parliamentary immunity — leaving him to face any criminal proceedings in the ordinary courts.
Vice-President Pedro Alliana automatically assumes the presidency and will serve until the constitutional term ends in August 2028.
Peña, a former finance minister who promised to rebuild a “great Paraguay,” had been a key ally of US President Donald Trump in the region — one of the few Latin American presidents to attend Trump’s second inauguration. US officials, including Secretary of State Marco Rubio, repeatedly praised him as a “strategic partner,” and Peña recently flew to Washington to discuss critical minerals and economic cooperation. Neither Rubio nor Trump has yet commented on his resignation.