Paraguay's Peña resigns after Ueno Bank collapse and impeachment push

What happened

Paraguayan President Santiago Peña said on Nov. 5 that he would resign, following the collapse of digital lender Ueno Bank and a political confrontation that had reached Congress. In a video posted on X, Peña said he was acting to protect the country's stability, social peace and democratic institutions, and that depositors' savings were his priority. Reuters reported that he announced the decision after losing support within his own conservative party while opposition legislators pursued impeachment.

The Central Bank of Paraguay announced resolution proceedings for Ueno Bank on Nov. 3, after a unanimous board decision dated Nov. 2. The regulator said adjustments made during a regularization process pushed the lender's solvency ratio below half the required minimum. Ueno customers lost access to accounts, and the bank had administered close to $850 million in public funds, according to Reuters.

Peña's announcement came during an extraordinary session of the Chamber of Deputies, where lawmakers had been debating impeachment for more than two hours, EFE reported. The accusations reported by Reuters included conflicts of interest, misuse of pension funds and institutional cover-ups connected to the bank's failure. Peña has denied wrongdoing and characterized the dispute as a regulatory matter that became political.

Why it matters

The case puts Paraguay's deposit guarantee system and presidential succession rules under immediate pressure. About 3 million Ueno customers have been unable to reach their accounts, and the central bank has begun paying eligible depositors in stages. The first group is limited to customers with combined deposits of no more than 10 million guaraníes, no debts to Ueno and an active account at another domestic bank or financial institution. That initial threshold is separate from the statutory insurance ceiling of 228.3 million guaraníes per depositor at each institution. The political fallout also extends beyond banking: Congress must decide whether to accept Peña's resignation, and the episode has raised questions about oversight of lenders connected to powerful business groups.

What the data shows

The central bank said Ueno's solvency ratio fell below half the regulatory minimum. Reuters reported that the bank handled nearly $850 million in public funds. Roughly 3 million customers lost account access, according to Crypto.news. Initial guarantee payments cover eligible depositors with balances of up to 10 million guaraníes, while the statutory insurance ceiling is 228.3 million guaraníes per depositor per institution. In crypto markets, one Bybit peer-to-peer listing viewed early on Nov. 5 offered USDt at 6,942 guaraníes, about 13% above the central bank's Nov. 4 reference rate of 6,144.02 guaraníes per dollar, Cointelegraph and The Cryptonomist reported. Other offers on the same marketplace were substantially lower, including smaller listings near 5,000 guaraníes.

Background

Peña was elected in April 2023 and took office that August for a five-year term due to end in 2028. Before the crisis, he faced scrutiny over his former business ties to Grupo Vázquez, the conglomerate controlling Ueno Bank; AP reported that he remained a business partner of the group until March 2025. Ueno had previously disclosed regulatory demands involving loans to companies connected to its ownership group. In an Oct. 14 statement, the bank said it had met requirements issued on June 5 and July 24, including bringing specified companies into its related-party group, adjusting consolidated exposure and selling part of a loan portfolio. It said the measures were completed on time and did not result in fines, while acknowledging a separate administrative proceeding over alleged indirect financing linked to a portfolio sale, which it denied violated rules. ABC Color reported that eight executives connected to Ueno and associated companies were detained on Nov. 3, including bank president Juan Manuel Gustale and Grupo Vázquez president Miguel Vázquez.

What is still unclear

Several questions remain open. Congress has not yet decided whether to accept the resignation. Under the Constitution, Vice President Pedro Alliana would complete the presidential term if lawmakers accept it. Article 202 gives Congress authority to accept or reject a resignation, and Article 234 provides for the elected vice president to assume a vacant presidency until the term ends. The central bank has said it will announce later payment groups through official channels, but the timing and scope of those payments are not settled. It is also unclear how the criminal and regulatory investigations will proceed, or what the final cost will be to public funds and depositors.

What to watch

Lawmakers' handling of the resignation and any impeachment process will determine who leads Paraguay through the remainder of the term. Also worth watching is the central bank's administration of Ueno's resolution, including further depositor payments and any recovery of assets. The detentions reported by ABC Color and the separate administrative proceeding over related-party lending may shape the inquiry. Market observers may also track whether the premium on some Paraguay-facing USDt listings persists as banking services normalize, though a single advertised price does not establish a broad market rate.

Questions readers ask