Paraguay's President Santiago Peña submitted his resignation on Thursday, 5 November 2026, after the collapse of the digital lender ueno left around three million people unable to reach their money. But in a twist that has left the country in limbo, Congress has not accepted the resignation — and impeachment proceedings against him are still going ahead.
Santiago Peña in Asunción in June 2026. Photo: Isaac Castillo / Presidencia de la República del Ecuador, via Wikimedia Commons (public domain).
How the ueno bank collapse brought down a president
The crisis began when Paraguay's central bank stepped in at ueno, saying the fast-growing digital bank had breached its minimum solvency requirements. The intervention froze the accounts of roughly three million customers — nearly half the population of a country of 6.5 million people. Ueno had also been administering close to $850 million in public funds, including money from state institutions and pension-related bodies.
As customers found themselves locked out of their accounts, protests grew and opposition lawmakers moved to remove the president. The central bank said it was working to transfer ueno customer accounts to other banks, a process that strained the wider banking system and caused outages at several banking apps.
The accusations against Peña
Lawmakers accuse Peña of conflicts of interest, misuse of pension funds and institutional cover-ups linked to the collapse of ueno. Peña, an economist elected in 2023, had past business ties to Grupo Vázquez, the group that controlled ueno. He has said he was a shareholder until March 2025, when he sold his stake, while ueno says he never had a direct relationship with the bank as a shareholder or investor.
The fallout has already claimed other senior figures. Central bank chief Carlos Carvallo — who had previously headed ueno — resigned on Tuesday after the bank was put into resolution, the central bank's strongest measure short of immediate liquidation. Prosecutors issued arrest warrants for eight ueno executives, who later turned themselves in. Prosecutors said on Thursday that Peña is among those being investigated over the bank's failure, though he has not been taken in for questioning.
A resignation Congress refused to accept
Peña announced his decision in a recorded video address on Thursday, saying he was acting with the country's stability, social peace and the need to preserve its democratic institutions in mind. By then he had lost the backing of members of his own conservative Colorado Party, and Vice President Pedro Alliana was lined up to take office as his replacement.
But when Congress met to consider the resignation, legislators from the governing party walked out of the joint session, depriving it of a quorum, and the resignation was not approved. That means Peña technically still holds the office of president. The lower house had already voted 78 to none to send the impeachment case to the Senate, and on Friday the Senate resumed impeachment proceedings. Peña has asked for a 72-hour extension to prepare his defence.
What happens next in Paraguay
The immediate question is whether Congress will accept the resignation or press ahead with impeachment. If the resignation stands, Alliana is set to take over. If impeachment proceeds, Peña would have to defend himself before the Senate while remaining in office. Either way, the priority for millions of Paraguayans is simpler: getting their money back. Peña earlier this week approved legislation to help speed up payments to depositors affected by the collapse.
Why the crisis matters beyond Paraguay
Paraguay is a close ally of the United States — Peña is an ally of President Donald Trump — and one of only 12 countries that still maintain formal diplomatic ties with Taiwan. Taiwan said on Friday that its friendship with Paraguay was unaffected by the political turmoil. The episode is also a warning about how quickly a fast-growing digital bank can become a national crisis when it holds the savings of half a country and hundreds of millions of dollars in public money.
Read the related story on this blog: Spain Transport Minister Oscar Puente Resigns After Deadly Urda Train Crash
Source: Reuters, 5 November 2026. Further developments: Reuters, 6 November 2026.
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