Paraguay President Resigns Following Collapse of Major Digital Bank

Paraguayan President Santiago Peña resigned on Thursday after the collapse of Ueno Bank triggered nationwide protests and the loss of access to savings for millions of citizens across the country.

Minutes after the announcement, the lower house voted 78-0 to impeach the president, sending the charges to the Senate as the country prepared for a transfer of power to Vice President Pedro Alliana.

The collapse of Ueno Bank, which claimed 60 percent of the adult population as customers, has frozen deposits and left thousands of employees without wages, threatening the stability of the South American nation.

“Dear compatriots, today I address you at one of the most difficult moments of my life,” said Santiago Peña, the former president, in a video statement announcing his departure.

“I have decided to submit my resignation as president of the republic,” he said, citing the need to preserve democratic institutions and social peace.

The bank, which held approximately $800 million in public deposits, was placed into resolution by the central bank last Monday following reports of risky lending practices and inadequate capital reserves.

Peña faced intense pressure after his own Colorado Party joined the opposition in backing impeachment, with former President Horacio Cartes publicly endorsing the move to address the alleged theft of public funds.

“We will not stand on the side of the theft of public, private and pensioners’ funds,” said Horacio Cartes, the leader of the Colorado Party.

The president had previously held a stake in a company related to Ueno Bank, a connection that drew criticism regarding potential conflicts of interest as state funds were directed to the lender.

Peña defended his past financial ties, stating he had disposed of his shares, while describing earlier allegations of favoritism as a false campaign intended to weaken his administration.

“I also want to apologize to the people if I have failed them at any point,” said Peña. “It was never my intention to betray the trust they placed in me.”

Prosecutors have charged 27 bank officials with breach of trust and fraud, with a judge ordering the incarceration of six executives, including the bank's founder, pending trial.

While authorities have introduced a state-backed mechanism to guarantee deposits, it remains unclear how quickly customers will recover their funds or how the political transition will affect the ongoing investigation.