Paraguay’s ex-president Pena faces new charge over Ueno bank collapse

On November 3, 2026, Paraguayans attempting to use the Ueno banking app discovered they could no longer access their funds. Within days, the financial instability sparked a political crisis, resulting in President Santiago Peña's removal from office and his arrest on corruption charges. This series of events has exposed the contradiction between Paraguay's economic growth and the potential risks associated with its financial sector.

Ueno, a digital bank celebrated for providing financial services to the general population, grew through strong ties with political elites and public institutions. However, this close relationship may have contributed to the bank's downfall. Despite early warning signs, such as a supervisory report highlighting loans to companies linked to Ueno's controlling shareholder, the issues went unnoticed for some time.

The collapse of Ueno came swiftly on November 2 when the central bank placed the bank under resolution, similar to bankruptcy proceedings. Overnight, the bank halted transactions, affecting nearly 3 million customers, half of Paraguay's population. President Peña, who had close connections to the bank, resigned the following day, and the Senate subsequently removed him from office, placing him under house arrest and charging him with corruption.

The political and financial crisis has led to widespread protests accusing Peña and the ruling Colorado Party of stealing citizens' savings. The involvement of public funds in Ueno, including $850 million in social security system funds, has further exacerbated the situation. While President Peña denies any wrongdoing, prosecutors are investigating allegations related to his former business interests and the financial supervision during his administration.