Nearly three million Paraguayans, representing roughly sixty percent of the country’s adult population, found their bank accounts frozen overnight when the central bank ordered digital lender Ueno Bank into resolution over insolvency, triggering a severe political and economic crisis that culminated in the impeachment and house arrest of President Santiago Peña.
The sudden intervention hit account holders hard just a day after payday, leaving citizens unable to view balances or pay basic everyday expenses. Pedro Volpe, a 50-year-old writer and lawyer in Asunción, told The Guardian that he woke up to a friend’s message asking if his account was down, quickly discovering his own funds were inaccessible.
If only we had a technology where you could access your money 24/7 and you don't have to trust anyone https://t.co/sMKZaYM8TI
Ueno had expanded aggressively across South America’s financial sector in recent years. Backed by extensive marketing that included sponsoring the national football team and major clubs, the lender grew from an obscure finance company into the primary banking choice for a large portion of the population by offering generous investment returns and a user-friendly mobile application.
The ripple effects quickly paralyzed daily commerce. Businesses across the country reported sales drops of up to eighty percent during the initial week of the freeze. Meanwhile, media outlets tied to the bank’s financial group suspended operations, halting the wages of 300 workers, while approximately 32,000 pensioners reliant on public funds invested in the institution faced delayed payments.
When things happen in Latin America, sometimes they happen very fast. Santiago Peña, Paraguay's president until yesterday, is now under arrest:https://t.co/GGRFKkcOTN
The crisis reached the highest levels of government by Friday, November 6, 2026. Paraguay’s Senate voted overwhelmingly—44 to 45 members—to impeach President Santiago Peña following emergency legislative sessions. Rather than accepting a resignation letter Peña posted on social media, lawmakers stripped him of the immunity usually granted to former presidents.
Following his removal, prosecutors brought criminal charges against Peña for breach of trust and administration for personal gain. Vice President Pedro Alliana was swiftly sworn in to serve the remainder of the presidential term until 2028, promising that affected citizens would be fully compensated.
I have to remind myself that other countries do sometimes hold their presidents accountable for crimes and corruption. Something to aspire to. https://t.co/kfCMYb8RMc pic.twitter.com/O6M8dP1CI4
Legal representation for the former president pushed back against the proceedings. Defense lawyer Ricardo Preda described the allegations as a reckless, irresponsible, and opportunistic accusation.
Regulatory Capture and Public Funds Under Scrutiny
Peña, a former finance minister and International Monetary Fund employee who took office in August 2023 at age 44, appointed Carlos Carvallo Spalding to lead the central bank shortly after his inauguration. Spalding had previously served as chief executive of Ueno.
Less than three months after that appointment, the central bank authorized Ueno to transition from a finance company into a digital bank. Financial records revealed that Peña personally held roughly one million dollars in shares purchased in 2019 in the enterprise that evolved into Ueno Holding, retaining those holdings until April 2025.
ABC News noted that Ueno managed between $800 million and $850 million in public money, including approximately $380 million from Paraguay’s state pension and health fund, known as the IPS. Investigators allege the administration actively relaxed regulations to permit these state investments despite internal central bank reports warning of serious lending irregularities, such as loans funneled to companies within the same corporate group.
[Paraguay’s president quits after millions of people’s savings frozen in bank crisis] “Santiago Peña’s rightwing administration had authorised Ueno Bank to drastically expand operations before collapse“https://t.co/yuycS6Kl3g””
Metric / Official Action Details Affected Depositors ~3 million (60% of Paraguay’s adult population) Public Funds Involved $800M – $850M (including state pensions) Senate Impeachment Vote 44 in favor, 1 absent Ueno Solvency Ratio Fell below 50% of the required minimum.
Protests, Arrests, and the Road to Resolution
Street demonstrations intensified throughout Asunción as thousands demanded access to their savings, leading to occasional clashes with police who deployed tear gas and water cannons. Law enforcement authorities acted swiftly alongside the political upheaval, arresting eight senior executives and directors from Ueno and its controlling parent company on suspicion of concealing the lender’s worsening financial health for months.
While the central bank established a guarantee fund covering deposits up to $38,000—a threshold applying to more than ninety percent of individual account holders—payouts have moved slowly. By late Friday, regulators initiated reimbursements strictly for customers with balances under $1,565 who carried no outstanding debts and maintained a secondary account elsewhere.
For citizens like 25-year-old chef Paola Benítez, who met the strict criteria yet remained unable to access wedding savings by Friday afternoon, the situation remains deeply stressful and confusing.
