Paraguay’s president impeached over Ueno Bank crisis freezing 60% of accounts

Consensus Summary

Paraguay’s president, Santiago Peña, was impeached and placed under house arrest after a catastrophic banking crisis left 2.9 million people—about 60% of the country’s adult population—unable to access their accounts at Ueno Bank. The collapse of the digital lender, which managed between $800 million and $860 million in state and pension funds, triggered nationwide protests, economic paralysis, and a political crisis. Impeachment proceedings began on Wednesday and concluded on Friday, with Peña’s arrest ordered shortly afterward, while Vice-President Pedro Alliana was sworn in to complete the term until August 2028. The Guardian and ABC both report that Peña’s attempt to resign on Thursday was rejected by lawmakers, who sought to strip him of parliamentary immunity and subject him to ordinary courts.

The crisis at Ueno Bank unfolded rapidly, with the central bank seizing control of the institution on Tuesday due to insolvency, freezing deposits overnight. The bank had expanded explosively under Peña’s administration, growing from an obscure fintech company into one of Paraguay’s largest lenders in just five years. Ueno’s rapid rise included aggressive marketing tactics, such as cash-back offers on groceries and sponsorship of Paraguay’s national football team, while it also attracted public funds, including pensions and state deposits. Both outlets agree that Peña’s ties to the bank—including his ownership of shares in Ueno Holding until April 2025—raised serious conflicts of interest, particularly after he appointed Carlos Carvallo Spalding, a former Ueno CEO, to head the central bank, which then approved Ueno’s digital banking license at the end of 2023.

Key figures in the scandal include Peña, who faced accusations of illicit enrichment, money laundering, and influence peddling, as well as Horacio Cartes, the leader of Peña’s Colorado Party, who publicly backed impeachment on Thursday. The Guardian reports that Peña’s own party abandoned him as retail sales plummeted by up to 80% due to frozen accounts, while ABC highlights the role of Paraguay’s Attorney General, Emiliano Rolón Fernández, who ordered three criminal investigations into the bank’s collapse. Protesters, some of whom clashed violently with police, demanded the return of their savings, with ABC quoting one demonstrator as shouting, 'Santiago Peña and the Colorado Party have stolen all our savings.' Peña’s resignation attempt was framed as a desperate bid to retain his senatorial immunity, but lawmakers saw it as an admission of guilt.

While both sources agree on the broad outlines of the crisis, they differ in emphasis and detail. The Guardian focuses on the immediate aftermath of Peña’s impeachment, including his house arrest and the public prosecutor’s investigation, while ABC provides more granularity on the bank’s collapse, such as the arrest of eight Ueno executives and the central bank’s seizure of the institution. The Guardian also notes rumors that Peña fled to Argentina, a claim not mentioned by ABC. Additionally, ABC includes specific actions taken by Peña, such as enacting a law to return deposits within five days, while the Guardian highlights his social media posts and the opposition’s characterization of the scandal as the 'biggest fraud' in Paraguay’s democratic era. Both outlets, however, agree that the crisis has exposed deep corruption and institutional failure.

The unresolved questions center on the fate of the frozen funds and the potential criminal charges against Peña and other officials. The Guardian and ABC both state that Peña will face ordinary courts, but the timeline for his trial and the recovery of public funds remains uncertain. ABC notes that the Attorney General’s investigations will examine the oversight of Ueno Bank, its failure, and the placement of public funds, suggesting a prolonged legal process. Meanwhile, the political fallout continues, with Vice-President Alliana now leading a country grappling with economic distress and public anger. The Guardian and ABC both emphasize that the scandal has shattered trust in Paraguay’s financial system and political institutions, with long-term consequences for the country’s stability.