Paraguay’s president announced his resignation on Thursday after a major bank with close ties to his administration went under, leaving half the country’s population of six million without access to their money.
In a video statement posted online at 1:16 p.m., President Santiago Peña, a conservative economist, said he was stepping down in the interest of stability. He described the decision as “one of the hardest moments of my life.”
“I want to apologize to the people if I ever failed you,” said Mr. Peña, who was facing an impeachment vote in the lower house of Congress in connection with the bank failure for what lawmakers called a “systematic dereliction of duty.”
“It was never my intention to betray the trust you placed in me,” Mr. Peña said.
Minutes after his announcement, lawmakers voted unanimously to proceed with impeachment.
The dramatic downfall of Mr. Peña, 47, who was elected in 2023, has plunged a die-hard South American ally of the Trump administration into deep political uncertainty.
It also threatens to frighten investors away from a poor and corruption-plagued nation that had recently won plaudits for reforms. The economy grew by 6.6 percent in 2025, the fastest for any Latin American nation save oil-rich Guyana.
The bank at the heart of the scandal, Ueno, was taken over by Paraguay’s Central Bank early Tuesday after regulators found it was no longer solvent. Millions of Paraguayans soon discovered that they could no longer withdraw cash, make digital payments or use their bank cards to buy groceries.
“I woke up on Tuesday without being able to do anything, without a single peso,” said Benicia Sosa, 56, who attended a protest on Wednesday night outside Congress.
“I feel heartbroken,” said Ms. Sosa, a domestic employee from Luque, a city on the outskirts of Asunción, the capital.
Her husband and eight children had all been locked out of their Ueno accounts, she said.
“We don’t know where to turn,” Mrs. Sosa said. “We can’t live on water alone. We have kids, we have grandchildren. We all depend on the bank.”
She said she had been attracted by a Ueno offer that gave cardholders up to 40 percent cash back at supermarkets.
She said she also regretted voting for Mr. Peña, who promised to build the economy and create half a million jobs.
“I was stupid,” she said, before rejoining a march toward the presidential palace. “The economy is going to hell.”
Earlier on Thursday, the attorney general’s office said it was evaluating a formal criminal complaint against the president filed by lawmakers.
In the space of a few decades, Ueno rose from its origins as a money lender in a ramshackle Asunción market to a youth-friendly banking app and major financial player sometimes likened to Revolut or Nubank. But skeptics have long suggested that this rags-to-riches rise was enabled by public money and high-up connections.
When Mr. Peña assumed office in August 2023, he appointed Ueno’s former president, Carlos Carvallo, to lead the Central Bank. Months later, the Central Bank gave Ueno a license to formally become a bricks-and-mortar bank.
Mr. Carvallo resigned on Tuesday.
As of late October, Ueno — whose name is not capitalized in company documents, and translates roughly as “good” — said it had some 2.9 million clients. It also held over $800 million in government money, including roughly 10 percent of a public pension fund.
Ueno sponsored Paraguay’s national soccer team and dozens of other businesses and brands. A sister company, Itti, grew to hold dozens of state contracts involving citizen data.
Last year, Mr. Peña said he had formally divested from another related company, Ueno Holding, amid criticism that his shares amounted to a conflict of interest. He said nothing illegal had taken place.
Still, the bank’s proximity to power provoked the suspicion of regulators — and the enmity of rivals, analysts said.
Disquiet broke into the open in September, when lawmakers loyal to Horacio Cartes, a powerful former president, asked the Central Bank to answer questions about Ueno. Mr. Cartes is also the leader of the Colorado Party, which has ruled Paraguay for nearly all of the past 80 years.
Mr. Peña had been finance minister under Mr. Cartes, a tobacco baron whom the Biden administration punished with sanctions, alleging corruption. But the two men had a falling out amid a dispute over who would lead the party into elections in 2028, according to Miguel Carter, a Paraguayan-American political scientist.
In October, reports indicated that Ueno had lent roughly $150 million to small firms linked to its own managers and employees, potentially breaching banking regulations and threatening its balance sheet. Worried about its solvency, overseas investors began to dump Ueno’s bonds.
This month, Ueno offered further perks to savers who kept cash in their accounts.
Last week, it said it had raised $100 million from investors and its own Luxembourg-registered holding company, and denied reports of an imminent intervention.
The speed with which Ueno crumbled surprised even its critics, and recalled a 1995 crisis that wiped out half of Paraguay’s banks. “It came around as a kind of tsunami in the end,” said Mr. Carter, the political scientist.
Mr. Carvallo, the Central Bank president who resigned on Tuesday, said at a news conference that the broader financial system was safe, and that Ueno clients would get their money back “as soon as possible” — up to the value of roughly $38,000.
That limit also applies to companies, analysts said, meaning firms that had deposited large amounts of cash with the bank could also go under.
The next in line to succeed Mr. Peña is Vice President Pedro Alliana, also a Colorado Party member. But some lawmakers said that Mr. Peña should not be allowed to simply walk away from the presidency.
“Resignation isn’t a positive way out,” said one opposition member of Congress, Johanna Ortega.
Under the Constitution, she said, if Mr. Peña were allowed to quit, he would become an honorary senator with parliamentary privilege. That, she said, would shield him from investigation, adding, “It’s a mess.”
Local news media reports indicated Mr. Peña may be considering fleeing the country with the assistance of the United States, mirroring the flight last month of the losing Brazilian presidential candidate Flávio Bolsonaro.
Last night, the president’s office denied “rumors” that were circulating without going into further details. The U.S. Embassy in Asunción referred questions to the State Department.
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