Paraguay President Santiago Peña resigns after bank collapse sparks protests

Paraguay has been plunged into political uncertainty after President Santiago Peña announced his resignation, following mounting pressure over the collapse of a major digital bank in which he previously held business interests.

Peña made the announcement in a video shared on social media, saying his decision was driven by the need to prevent further instability and preserve public confidence in the country's democratic institutions.

"I want to apologise to the people if at any point I failed," he said. "It was never my intention to betray the trust you placed in me."

His departure follows the financial collapse of Ueno Bank, which was placed under an insolvency process, forcing it to suspend all operations and leaving millions of customers unable to access their accounts.

The bank's failure drew political scrutiny over Peña's previous association with the institution. Lawmakers questioned his involvement, noting that he held shares in the company that owned the lender until last year, and accused him of misconduct and a possible conflict of interest.

Peña, however, dismissed allegations of wrongdoing as pressure for his removal intensified.

The political situation deteriorated further after Paraguay's lower house of Congress voted to support efforts to subject the president to an impeachment trial. His resignation came against the backdrop of growing public anger over the banking crisis and demands for accountability.

In explaining his decision, Peña said he wanted to prevent the situation from threatening national stability, social peace and the country's democratic institutions.

Ueno Bank had approximately three million customers, accounting for about 60 per cent of Paraguay's adult population. The institution also managed pension funds and other public resources, making its collapse a major concern for depositors and the wider economy.

The shutdown left millions of account holders unable to access their money, prompting demonstrations across the country. Protesters took to the streets demanding Peña's departure and calling for action over the bank's failure.

In response to the crisis, the Central Bank of Paraguay took control of the digital lender as authorities moved to address the fallout.

A new head of the country's central bank has since been appointed, while Congress has approved a process to facilitate the repayment of depositors whose funds were affected by the collapse.

Peña came to power in 2023 after winning the presidential election as the candidate of the ruling conservative Colorado Party. He defeated a centre-left challenger to secure the presidency.