ASUNCIÓN, Paraguay - Paraguayan President Santiago Peña has announced his resignation amid mounting political pressure following the collapse of a major digital bank that left millions of customers unable to access their savings and triggered calls for his impeachment.

Peña announced his decision on Thursday, November 5, bringing his presidency, which began in August 2023 and was due to run until 2028, into a major political crisis.

The 47-year-old president said his resignation was motivated by the need to protect national stability, preserve social peace and safeguard democratic institutions.

In a video statement announcing his decision, Peña also apologised to the people of Paraguay if he had failed to meet their expectations, while emphasising that his immediate priority was ensuring that customers affected by the banking crisis could recover their money.

“I have made the decision to submit my resignation from the Presidency of the Republic,” he said.

His announcement came as lawmakers were preparing to advance impeachment proceedings against him, following the intervention of Ueno Bank by Paraguay’s Central Bank.

Bank collapse sparks national crisis

At the centre of the controversy is Ueno Bank, a rapidly expanding digital financial institution that reportedly served approximately 2.9 million customers in a country of about 6.5 million people.

The Central Bank intervened in the institution after discovering that its solvency ratio had fallen below the legally required minimum, prompting the bank’s closure and leaving customers unable to access their deposits.

The institution also administered approximately US$800 million to US$850 million in public funds, including money connected to state institutions and pension-related entities.

The collapse raised serious concerns about financial oversight, the handling of public resources and the potential exposure of pensioners’ funds.

The controversy was particularly damaging for Peña because of his previous business connections to Grupo Vázquez, the business group associated with Ueno Bank. The president has said he sold his shares in the group in March 2025 and has denied any wrongdoing.

However, opposition lawmakers questioned whether his previous financial interests created a conflict of interest and accused his administration of failing to adequately address concerns surrounding the bank.

The controversy intensified after the Central Bank’s intervention, with prosecutors ordering the arrest of eight bank executives and directors as investigations into the institution continued.

Impeachment proceedings underway

Political pressure intensified when members of Peña’s own conservative Colorado Party withdrew their support, with former president Horacio Cartes publicly backing impeachment proceedings.

The Chamber of Deputies subsequently approved an impeachment motion unanimously on Thursday, shortly after Peña announced his resignation. The motion was then expected to proceed to the Senate for consideration.

Peña indicated that he intended to defend himself during the impeachment process, maintaining his position that he had committed no wrongdoing.

The political turmoil was accompanied by public demonstrations in the capital, Asunción, where protesters demanded accountability and answers over the loss of access to their savings. Police used tear gas and water cannons to disperse demonstrators.

The crisis also affected Paraguay’s financial markets, with its currency weakening sharply against the US dollar and sovereign bond prices falling following the resignation announcement.

Vice President next in line

Vice President Pedro Alliana is constitutionally positioned to succeed Peña should the resignation be formally accepted by Congress.

Alliana, however, has distanced himself from the president in recent days and temporarily put his own presidential ambitions on hold amid the unfolding financial crisis.

Peña’s departure represents a significant political setback for the Colorado Party, which has dominated Paraguayan politics for decades.

The developments have also attracted regional attention. Peru’s government has said it is closely monitoring the situation and called for the political transition to respect Paraguay’s constitutional framework and democratic institutions.

For Paraguay, the immediate challenge extends beyond the resignation of its president. The country must now address the financial fallout from Ueno Bank’s collapse, restore public confidence in its banking system and establish accountability for the handling of funds belonging to ordinary citizens and public institutions.

The resignation marks one of the most serious political and financial crises to confront Paraguay in recent years.