How a digital bank’s collapse toppled Paraguay’s president

Paraguay's digital bank ueno emerged as a homegrown success story, attracting half the country's population to open accounts, many of whom were experiencing their first bank account. However, within five days at the end of March, the bank collapsed, leaving nearly 3 million customers without access to their savings in a nation of 6.5 million people, igniting the country's most severe political crisis in over a decade.

President Santiago Pena was impeached on Friday evening, just hours after he attempted to resign, and his vice president Pedro Alliana was sworn in as his successor. Pena, an economist and supporter of US President Donald Trump, was subsequently arrested and faced charges of breach of trust and administration for personal gain, with a judge ordering his detention at a military facility.

He vehemently denied any wrongdoing, pleading not guilty to the allegations. The scandal sparked public protests and harsh criticism from the opposition, who deemed it the most significant corruption case in Paraguay's democratic history. Manuel Ferreira, a former finance minister, likened the situation to a modern-day Bonnie and Clyde, stating that the president and the bank were thieves who stole from the people using an app.

The head of the central bank, also implicated in the case, was charged on Saturday with breach of trust, producing false public documents, and administration for personal gain.