Ueno bank suspension froze the accounts of 2.9 million Paraguayans overnight
Paraguay’s impeached former president Santiago Peña was placed under house arrest minutes after Congress concluded proceedings removing him from office, capping a week in which the suspension of digital lender Ueno left 2.9 million customers — about 60% of the country’s adult population — unable to reach their own money. His vice-president, Pedro Alliana, was sworn in as the country’s new leader.
Public prosecutor Elena Fiore Franco, accompanied by police outside Peña’s home, told local media the former president had been placed under house arrest. “It has been established that he is indeed inside his home. He voluntarily allowed officers to enter and made himself available for all procedural purposes,” she said.
Peña, a 47-year-old economist who had been one of US President Donald Trump’s main allies in the region, is being investigated over allegations that he used his political influence to favour Ueno, a bank that expanded exponentially under his government and was suspended this week after irregularities. The public prosecutor’s office opened the investigation on Thursday on suspicion of illicit enrichment, money laundering and influence peddling.
The bank’s suspension froze the accounts of its 2.9 million customers, who overnight could no longer use their own money even for basic purchases such as bread and water. Protests spread across the country, some involving violent clashes with police. Retail sales fell by as much as 80%, according to the Guardian’s reporting, and Peña lost the support of his own party as pressure mounted.
Impeachment proceedings began on Wednesday and concluded on Friday, minutes before the arrest was ordered. Peña had tried to resign on Thursday, a step that would have preserved the special jurisdiction afforded to former presidents — who become senators for life in Paraguay — but lawmakers did not accept the resignation, leaving him subject to the ordinary courts.
Amid rumours he had fled to Argentina, Peña was expected to appear before Congress to present his defence during the impeachment proceedings, but he left that to his lawyers and continued posting on social media. Before the impeachment was concluded or the arrest warrant issued, he posted: “I say goodbye with gratitude, while fully recognising the anguish of those who are now waiting for answers,” referring to former Ueno customers who are unable to access their own money.
The ties under investigation reach to the top of the country’s financial regulator. Soon after taking office, Peña appointed Carlos Carvallo Spalding, a former chief executive of Ueno, to head the country’s central bank. Three months later, Spalding — by then regulating the company he had run — allowed Ueno to become a digital bank, putting it on the path to becoming one of Paraguay’s largest banks by deposits in just a few years. The arrest warrant for Peña also includes Spalding.
Peña himself held about US$1m in shares bought in 2019 in a company that would become Ueno Holding in 2022, the parent company of the conglomerate that controlled Ueno Bank. He did not dispose of the shares until April 2025, after he had become president, and said he had bought them purely as an “investor”.
As the bank aggressively expanded through an easy account-opening system and by promising returns far above those offered by the rest of the market, it also brought public pension funds controlled by Peña’s administration into its portfolio. An estimated $800m to $860m in state and pension funds were invested in Ueno. “Because Ueno had the blessing of the presidency, most of the pension funds close to the government went to deposit their money in the bank,” said political analyst Hugo Duarte.
During the impeachment session, opposition senator Rafael Filizzola said Paraguay was facing “one of the biggest corruption scandals since the return of democracy” and the “biggest fraud carried out from political power in the democratic era”.