Paraguay's Santiago Peña Faces Senate Removal Trial After Ueno Bank Collapse Froze 3 Million Accounts
Paraguay's president tried to resign on Thursday. His own party would not let him — not to save him, but to put him on trial instead.
Santiago Peña announced his resignation in a video message on November 5, hours after the Chamber of Deputies voted 78-0 to impeach him over the collapse of ueno, a digital bank with some 2.9 million customers in a country of 6.1 million people. The central bank had seized ueno two days earlier, after finding its solvency ratio had fallen to 5.56 percent against a legal minimum of 12 percent. Overnight, nearly half the country lost access to its savings.
The resignation never took effect. A joint session of Congress convened to accept it lost its quorum when senators from Peña's own Colorado Party walked out. Opposition lawmakers say accepting the resignation would hand Peña a lifetime Senate seat and immunity — what they call an "impunity pact." So the resignation died on procedure, and the impeachment trial went ahead. The Senate opened proceedings on Thursday night, summoned Peña to present his defense on Friday morning, and Senate President Basilio Núñez said the trial could conclude the same day. Removal requires 30 of the Senate's 45 votes.
The speed of the collapse is the story. Ueno grew fast on a digital model and claimed more than 60 percent of Paraguay's adults as customers. Regulators found lending that was poorly documented and expenses counted as assets; once corrected, the bank's capital came to less than half the legal minimum. The central bank's board voted unanimously on Monday, November 2, to place ueno in resolution, and took control on Tuesday. Central bank president Carlos Carvallo resigned the same day at Peña's request. A judge has since ordered six ueno executives jailed pending trial, including founder Miguel Vázquez and bank president Juan Manuel Gustale. The attorney general has opened three criminal investigations.
The charges against Peña are conflicts of interest, misuse of pension funds, and shielding the bank from scrutiny. He held a stake in Grupo Vázquez, the group linked to ueno, though he says he sold his shares in March 2025. The impeachment motion was filed by 35 opposition and dissident ruling-party deputies — and then backed by the Colorado Party itself, led by former president Horacio Cartes, Peña's mentor and main political backer. When your own party votes to impeach you unanimously in the lower house, the trial in the Senate is less a question of guilt than of arithmetic.
What happens to the money matters more than what happens to Peña. He has promised to repay 98 percent of depositors under an emergency law, and Paraguay's Deposit Guarantee Fund protects up to 228.3 million guaraníes per depositor. But a guarantee fund is only as good as its funding, and the scale here is unusual: this is not a small bank failing at the margins, it is the country's largest digital lender, holding the everyday money of most working adults. The protests in Asunción are not about constitutional theory. They are about people who cannot withdraw their pay.
If the Senate removes Peña, Vice President Pedro Alliana takes over until August 2028. The deputies already rejected impeaching Alliana, 48 to 30, clearing his path. That vote is worth noting: Congress is not trying to decapitate the government, it is trying to surgically remove one man while keeping the line of succession intact. It is also worth noting what that means for the trial — senators who want Peña gone have a clean successor waiting, which removes the usual excuse for letting a damaged president limp on.
Paraguay has spent years building a reputation as one of South America's most stable economies, and that reputation is now doing the opposite of what it was supposed to do. Stability was the story investors were told; a bank holding half the country's adults just failed, and the president is on trial in the same week. The question the Senate answers now is narrow — 30 votes, guilty or not — but the question Paraguay answers over the next months is wider: whether depositors get their money back, and whether a system that let a bank this big get this fragile has actually been fixed, or merely found a man to blame for it.