A major political crisis has shaken Paraguay. President Santiago Peña announced he is stepping down after a linked financial institution collapsed, leaving millions locked out of their money.
The trouble started when Ueno Bank went into insolvency and froze all its business. The digital lender held pensions along with other public funds, serving about 60% of the adult population in Paraguay. Following the shutdown, the central bank took control of the institution.
Anger on the streets and impeachment drama
Protesters quickly flooded the streets, demanding Peña step down from his post. Photographs outside the Congress building on Thursday captured tense clashes between police officers and demonstrators.
Lawmakers pointed fingers at Peña, who held shares until last year in the firm that owned Ueno Bank, alleging conflicts of interest and improper conduct. Peña denied doing anything wrong, explaining that his resignation was intended to protect social peace, stability, and democratic systems.
“I want to apologise to the people if at any point I failed. It was never my intention to betray the trust you placed in me.”Santiago Peña
Showdown in Congress
Although Peña offered to quit, Paraguay's Congress needs to formally approve a presidential resignation. Instead of doing so, a special session on Thursday was adjourned so lawmakers could proceed with an impeachment trial after the lower house voted to move ahead.
Meanwhile, the ruling conservative Colorado Party dropped impeachment plans against Vice President Pedro Alliana, who stands next in line to take over the top seat. A new president of the Central Bank of Paraguay has also been named, and Congress cleared a plan to repay affected depositors.
What happens next
Congress has scheduled a special session for Friday, where Peña is expected to present his defence during Senate impeachment proceedings.
