Paraguay’s Peña impeached after the sudden failure of Ueno Bank has plunged the country into political turmoil, with lawmakers voting unanimously to remove President Santiago Peña from office and placing him under house arrest. The move came just minutes after Peña himself had offered to resign, but senators chose impeachment instead, charging him with misconduct and stripping him of the immunity normally afforded to former presidents.
The collapse of the digital bank, which was seized by Paraguay’s central bank earlier this week, has left more than half of the population unable to access their savings. An estimated three million depositors are locked out of their accounts and pensions, triggering protests across the country, especially in the capital, Asunción.
Bank failure and public outcry
Ueno Bank’s downfall has become the catalyst for the most serious political crisis in Paraguay’s recent democratic history. The bank’s seizure by the central bank froze assets for millions of Paraguayans, many of whom rely on those funds for daily living and retirement. The scale of the impact—affecting over half the population—has fueled public anger and put immense pressure on the government.
Peña, who until last year held shares in the company that owned the bank, has consistently denied any wrongdoing. Nevertheless, the impeachment charges against him allege conflicts of interest, manipulation of regulatory oversight, diversion of pension funds, and participation in an institutional cover-up involving the central bank.
Impeachment and arrest
The Senate vote was swift and decisive: 44 out of 45 senators voted in favor of impeachment, with one lawmaker absent. Even members of Peña’s own party supported his removal. Following the vote, Senate President Basilio Núñez declared Peña guilty of dereliction of duty.
Peña was arrested on Friday shortly after the vote. He is due to be questioned on Saturday by prosecutor Silvia Margarita Gonzalez Vester over allegations of breach of trust, influence peddling, and misappropriation of funds. His defense lawyer, Ricardo Preda, dismissed the accusations as reckless, irresponsible, and opportunistic.
In a national address on Thursday, Peña expressed regret, saying he never intended to betray the trust placed in him. But his offer to step down was overtaken by the legislature’s determination to hold him accountable.
Interim president sworn in
Vice-President Pedro Alliana was quickly sworn in as interim President and will serve until 2028. In his first remarks, Alliana promised that compatriots enduring hardship due to the financial collapse would be fully compensated.
The political fallout has been widely condemned. Senator Rafael Filizzola described the situation as the biggest corruption scandal in Paraguay’s democratic history, calling it a tremendous blow to the state, to private citizens, and to the country’s credibility and .
Analysts suggest Peña is likely to face prosecution over the bank’s collapse, a prospect that hangs over a nation already reeling from the loss of savings for millions. The coming days will test Paraguay’s institutions as they navigate an unprecedented crisis.
