Paraguay’s Chamber of Deputies opened an extraordinary session on Thursday to decide whether to impeach President Santiago Peña, two days after the central bank took over Ueno Bank, one of the country’s largest lenders.
The political pressure escalated hours before the session. The ruling Colorado Party backed an impeachment trial against Peña, its leader and Peña’s mentor, former president Horacio Cartes (2013 to 2018), announced in a statement on X.
“We support the impeachment trial of the President of the Republic, Santiago Peña, in order to put the Republic’s institutions back on track,” Cartes wrote.
From Bank Failure to Impeachment
Paraguay’s Central Bank (BCP) ordered the intervention and dissolution of Ueno on Tuesday, after finding that its solvency ratio had dropped below 50% of the required minimum. The bank had 2.9 million clients in a country of 6.1 million people.
The freeze hit public money as well. The decision locked about $380 million belonging to the Social Security Institute (IPS), including deposits from roughly 32,000 retirees, along with funds from state power utility ANDE and the binational Itaipú dam.
On Wednesday, opposition lawmakers and dissidents from the ruling party filed the impeachment request against Peña and Vice President Pedro Alliana under Article 225 of Paraguay’s Constitution, backed by 35 signatures. The filing accuses Peña of poor performance of his duties and also questions a possible conflict of interest and the growth of his personal assets.
“Two out of every three Paraguayans can’t use their money today, and the main person responsible is Santiago Peña. Even his allies know that,” independent deputy Raúl Rubín told reporters.
Peña’s Ties to the Bank
Peña held shares in Ueno Holding, which he sold in April 2025, according to local media. He has said he had no link to the bank itself.
The central bank’s leadership also came under fire. BCP president Carlos Carvallo had chaired Financiera Ueno, the bank’s predecessor, before taking over the central bank in 2023. He has announced his resignation, and Peña asked Congress to confirm Raúl Vera Bogado as his replacement.
Meanwhile, police detained eight Ueno executives, including CEO Miguel Vázquez and chairman Juan Manuel Gustale, in a case involving breach of trust, misconduct during a crisis and fraud.
What Depositors Can Expect
Paraguay’s deposit guarantee fund covers up to 75 monthly minimum wages per person, about 228.3 million guaraníes (roughly $38,622).
Peña said an emergency law would cover 98% of the bank’s depositors, with payments starting this week. The central bank has set up an official page for depositors to check their payouts.
“I earnestly ask all political sectors to put the interests of savers ahead of any other interest,” Peña said in an address on Wednesday.
What Happens Next
Under the Constitution, two-thirds of the Chamber of Deputies must approve the charges before the case moves to the Senate, which acts as the court. Removal from office also requires a two-thirds majority in the Senate. That means at least 30 of the 45 senators.
The crisis has political consequences beyond Peña. Dissident Colorado deputy Mauricio Espínola warned that if Peña stays, the party has very little chance of holding on to power in the 2028 presidential election.
For Latin American savers, the episode adds to a long list of reasons to distrust local banks, a theme BeInCrypto has explored in its coverage of how the region is moving into digital dollars and how stablecoins made it easier for capital to leave.
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