The Paraguayan Senate voted unanimously on a Friday to impeach President Santiago Peña and place him under house arrest. The removal followed the collapse of Ueno Bank, a U.S.-owned digital lender with ties to the government in which Peña was a shareholder. Vice President Pedro Alliana was sworn in as president on Friday to serve the remainder of the term through August 2028.
The political crisis began on a Tuesday when Paraguay’s central bank seized control of Ueno Bank, citing a solvency ratio that no longer met legal standards. Ueno Bank, which specialized in digital services and grocery cash-back offers, reported having 3 million customers, representing more than half of Paraguay's adult population. The bank's failure led to protests in the capital, Asunción, on November 5, 2026.
Although Peña announced his resignation on a Thursday and denied any wrongdoing, legislators refused to accept the resignation and proceeded with impeachment. On the Saturday morning following the Senate vote, Peña appeared before prosecutors. According to the Senate’s website, lawmakers found him guilty of malfeasance in office, alleging he jeopardized state assets and benefited personally through his ties to the bank.
Prosecutors have charged Peña with breach of trust and other offenses. In a social media post, Peña stated, "I want to apologize to the Paraguayan people if I have failed you." This marks the first time a Paraguayan president has been ousted since Fernando Lugo in 2012.
The shift in leadership represents a change for the country's economic direction, as Peña was described by legislators as a pro-market leader focused on ease of business. The immediate day-to-day impact for millions of residents involves the freezing of grocery-related cash-back benefits and primary banking services. The central bank's seizure of Ueno Bank serves as a precedent for how the government may handle solvency issues in the digital lending sector, which previously brought a reported one million new users into the formal banking system.
The legal process involving Peña is ongoing following his appearance before prosecutors. While Alliana has been sworn in to complete the term ending in August 2028, the specific dates for court proceedings or the implementation of the compensation plan for bank customers have not been reported. The status of the criminal charges of breach of trust will be determined through the judicial system while Peña remains under house arrest.