Three Million Locked-Out Bank Customers Push Paraguay Into Impeachment Crisis
Paraguay’s banking crisis became a direct challenge to President Santiago Peña on Wednesday, November 4, when 35 lawmakers formally filed impeachment accusations after the collapse of digital lender Ueno locked roughly three million customers out of their accounts.
The move targets Peña and Vice President Pedro Alliana. It does not yet remove either man, and the opposition lacks the votes to force a trial. But it turns a fight over one bank into a national reckoning over political power, public money and financial regulation in a country of only 6.5 million people.
The Banco Central del Paraguay began Ueno’s resolution process after finding that its solvency ratio had fallen below half the legal minimum. The central bank said its November 2 decision followed adjustments to the bank’s financial statements during a regularization process and described Ueno as an isolated case, not evidence of a wider system failure.
That distinction matters, but it offers little immediate relief to workers, pensioners and families who cannot reach their pay or savings. Ueno grew from a small fintech operation into a mid-sized bank with about three million customers.
Reuters reported that Ueno also administered close to $850 million in public funds.
The fallout has already reached the state’s highest financial offices. Central bank president Carlos Carvallo resigned on Tuesday. Prosecutors issued arrest warrants for eight Ueno executives; the executives surrendered, and courts froze their assets as investigators widened the case.
Ownership, public funds and political responsibility
Peña worked as a shareholder in Grupo Vázquez, Ueno’s controlling group, until March 2025. That history does not by itself establish wrongdoing. It does, however, sit at the center of the lawmakers’ accusation.
The Chamber of Deputies said the filing alleges a conflict of interest, challenges Peña’s appointment of former Ueno executive Carvallo to lead the central bank and accuses the administration of allowing excessive concentrations of pension funds in Ueno. The filing also says Alliana helped shield the institution politically. Those claims remain accusations; Congress, prosecutors and the courts have not established them as facts.
“Never before has anyone harmed 3 million people in a single day in the Republic of Paraguay, and you achieved it, Mr. President,” opposition lawmaker Rocío Vallejo told the chamber before presenting the case, according to Reuters.
Peña has not directly answered the impeachment push. In a public video, he said he understood the uncertainty facing depositors and knew that every savings account represented years of work. He urged politicians to “put the interests of savers before any other interest” and said anyone responsible for irregularities must answer to justice “without exceptions.”
The president also sent Congress a proposal that he said could accelerate payments to 98 percent of Ueno’s depositors. The central bank says the deposit guarantee covers up to 75 minimum monthly salaries—currently 228.3 million guaraníes—per depositor at each institution.
Photograph: President Santiago Peña, New York, September 24, 2024, Presidency of Ecuador · public domain
The numbers protect Peña—for now
Paraguay’s constitution requires two-thirds of the 80-seat Chamber of Deputies, or 53 votes, to send an impeachment case to the Senate. Conviction there requires 30 of 45 senators. The 35 signatories include several dissidents from Peña’s ruling Colorado Party, but the opposition remains well short of both thresholds.
The arithmetic makes removal unlikely today. It does not make the crisis theatrical. A bank tied to a former presidential holding has failed a solvency test, millions have lost access to their money, public and pension funds sit inside the dispute, the central bank chief has quit and executives face criminal investigation. The impeachment filing converts those facts into a test of who answers when private finance and state power overlap.
Paraguay’s banking association said other lenders continued to operate normally while absorbing a rush of customers moving away from Ueno. The central bank likewise insisted that the wider system remained stable. Those assurances will carry weight only if institutions restore access, publish the true condition of the bank and trace every public guaraní without political protection.
The immediate issue is not whether Congress can assemble 53 votes. It is whether three million people regain control of their money—and whether Paraguay’s regulators, prosecutors and lawmakers can investigate a politically connected financial failure without trading accountability for partisan survival.
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