Paraguay President Santiago Peña Resigns After Ueno Bank Collapse Freezes Millions of Accounts

Paraguay has been plunged into one of its biggest political and financial crises in recent years after the collapse of digital lender Ueno Bank left millions of customers unable to access their savings and forced President Santiago Peña to resign.

Peña announced his resignation on Thursday, November 5, following mounting public anger, opposition demands for impeachment and the withdrawal of support from members of his own ruling party. The crisis erupted after the Central Bank of Paraguay intervened in Ueno, a rapidly expanding financial institution that served approximately three million customers and administered hundreds of millions of dollars in public funds.

The bank’s intervention triggered widespread disruption, leaving customers unable to access accounts through its app and other services. The fallout quickly moved beyond the financial sector, raising questions about regulatory oversight, political connections, and the security of public money.

Ueno Bank Crisis: How Millions Lost Access to Their Money

Founded in 2021, Ueno grew from a relatively small fintech operation into one of Paraguay‘s most prominent digital banking businesses. Its mobile-first model attracted customers looking for alternatives to traditional banking, helping it build a customer base of nearly three million in a country with a population of around 6.5 million.

However, the bank’s rapid expansion came under increasing regulatory scrutiny. Paraguay’s central bank intervened after identifying serious problems with its financial position and determining that Ueno had fallen below minimum solvency requirements.

The intervention effectively shut down customer-facing services, including its mobile application, cards, and transfers. Depositors were left uncertain about when they would regain access to their money, prompting protests and crowds outside bank branches.

Ueno had administered about $850 million in public funds, including money linked to government institutions and pension-related bodies. The scale of those holdings intensified concerns about the potential impact on Paraguay’s public finances and social security system.

Authorities have said they are working to transfer customer accounts to other financial institutions and protect eligible deposits through the country’s deposit guarantee arrangements.

Why Santiago Peña Was Forced to Resign

The banking crisis quickly became a political emergency because of Santiago Peña’s previous business connections to Grupo Vázquez, the holding group that controlled Ueno.

Santiago Peña acknowledged that he had held a stake in the business group but said he sold it in March 2025. He has repeatedly denied any improper involvement in the bank’s operations.

Opposition lawmakers accused Peña of conflicts of interest, misuse of pension-related funds, and providing institutional protection to the bank. These allegations intensified calls for impeachment, with lawmakers preparing proceedings against him as public protests gathered momentum.

Santiago Peña ultimately announced that he was stepping down, saying his decision was intended to protect national stability, social peace, and democratic institutions. Vice President Pedro Alliana is set to succeed him.

The resignation does not, however, resolve the questions surrounding Ueno’s collapse or the allegations against those connected to the institution.

Central Bank Chief Resigns as Ueno Executives Face Investigation

The crisis has also placed Paraguay’s financial regulators under scrutiny. Central bank chief Carlos Carvallo resigned after the intervention. His previous leadership role at Ueno has raised questions about potential conflicts of interest, although the central bank said he recused himself from decisions involving the lender.

Authorities have also issued arrest warrants for eight senior Ueno executives as prosecutors investigate the circumstances surrounding the bank’s failure.

The investigation is examining allegations of financial misconduct and the decisions that allowed the institution to expand while its financial position deteriorated.

Could Paraguay’s Banking Crisis Hit Its Economy?

The consequences extend beyond Ueno’s customers. The bank’s failure has disrupted payments and spending, while concerns about deposit safety have shaken confidence in the country’s financial institutions.

Paraguay had built a reputation as a relatively stable destination for investment in South America, supported by economic growth and investment-grade credit ratings. The banking crisis now threatens to undermine that image.

The central bank has said the problems are specific to Ueno rather than evidence of a wider banking-system failure. Nevertheless, restoring public confidence will depend on how quickly customers regain access to their money and whether investigators establish accountability.

For Paraguay, the immediate challenge is no longer simply rescuing a troubled bank. It is rebuilding trust in the financial system after a crisis that has already brought down the country’s president.