Paraguay Senate Removes President Peña as Bank Collapse Topples Government
Paraguay’s Senate removed President Santiago Peña from office on Friday, 6 November, over the collapse of digital bank Ueno, ending a presidency that had unravelled in less than a week and installing Vice President Pedro Alliana as the country’s new head of state.
All 44 senators present voted to remove Peña, with one senator absent from the 45-member chamber. Within the hour, Alliana, 52, was sworn in before a special session of Congress as Paraguay’s 53rd president. He will serve out the remainder of Peña’s term, which runs until 15 August 2028.
The vote capped a rapid fall. Peña, 44, had taken office in August 2023 as one of the youngest presidents in Paraguay’s history, representing the long-governing Colorado Party. On Thursday, he recorded a video address offering his formal resignation. Congress declined to accept it. Instead, the Chamber of Deputies voted 78–0 to impeach him, and the Senate moved to a one-day trial the following day.
By choosing removal over resignation, lawmakers stripped Peña of the lifetime Senate seat and legal immunity granted to former presidents — a decision that left him exposed to the criminal investigation now under way.
House arrest within hours
Prosecutors moved almost immediately after the Senate vote. Peña was placed under house arrest at his residence in Asunción on suspicion of breach of trust, known in Spanish as lesión de confianza, and other offences. He has been ordered to appear before the Economic Crimes and Anti-Corruption Unit on Saturday morning.
Former central bank president Carlos Carvallo Spalding was also detained in connection with the case, according to prosecutors. The Attorney General has opened three separate criminal cases against Peña and several former officials, CNN reported. At least 27 people face criminal charges in connection with the scandal, including Ueno’s lead shareholder, Miguel Vazquez.
Charges were still being determined on Friday night, prosecutors said, but could include influence peddling. The impeachment charges alleged that Peña had conflicts of interest, manipulated regulatory oversight, diverted pension funds and participated in an institutional cover-up involving the central bank.
A bank that held half a country’s savings
The crisis erupted after regulators seized Ueno, a digital lender that had grown from a niche fintech launched in 2021 into one of Paraguay’s largest banks. Ueno counted about three million customers — nearly half of the country’s roughly six million people — including many Paraguayans who had never previously held a bank account.
The bank also administered around $800 million to $850 million in public money, including roughly $355 million in state pension funds, according to reporting by Reuters. On 2 November, the central bank began liquidation proceedings after Ueno’s solvency ratio fell to less than half the required regulatory minimum. The central bank intervened the following day, seizing the lender and transferring its remaining assets to other institutions, leaving customers unable to access their savings and disrupting pension payments.
Peña had business ties to Grupo Vázquez, the conglomerate behind Ueno, until March 2025, according to his own account. The bank says he was never a shareholder or investor. Questions have also been raised about the role of Carvallo, who headed Ueno until 2023 before becoming central bank chief.
Peña is only the second Paraguayan president to be removed through impeachment, after Fernando Lugo in 2012.
What Alliana must do next
Alliana inherits a government in crisis and a banking system under strain. He has pledged to compensate customers affected by the collapse, and deposit-guarantee advances have begun, though those payments do not mean every account has been restored or the public funds exposed at Ueno recovered.
His first test will be restoring confidence in the financial system while prosecutors pursue a case that reaches into the highest levels of the state. The case adds to a run of leaders facing criminal proceedings around the world. Peña’s appearance before prosecutors on Saturday morning will be the next milestone in a scandal that has already ended one presidency — and could yet claim more.
