ASUNCIÓN, Paraguay — Paraguayan President Santiago Peña resigned Thursday in a video posted to X, hours before lawmakers were set to vote on impeaching him, after the collapse of Ueno Bank left close to three million people locked out of their accounts in a country of just over six million.

The resignation, which Euronews reported had Vice President Pedro Alliana set to take office, caps a stunning three days in which one of Latin America’s fastest-growing digital banks went dark, its executives were arrested, and protesters filled the streets of the capital demanding to know who would answer for their savings.

The Day the App Went Dark

The crisis erupted Tuesday, November 3, when Ueno’s mobile app stopped displaying balances, showing customers only a message that it could not display their balance. Paraguay’s central bank announced it was taking control of the institution and starting a resolution procedure. Cards stopped working, branches closed and depositors queued outside with no way to withdraw money.

Central bank board member Liana Caballero told the public the bank was being closed: “neither the app, nor the cards, nor any service is active from today,” Euronews reported. Roughly 7,000 Ueno employees were also affected, with wages unpaid.

The following day, a rush to open accounts at other banks reportedly crashed their apps. Protests broke out in Asunción on both Tuesday and Wednesday evenings. Placards asked, “Who will answer for a lifetime of savings? Will there be impunity?”

How a Fast-Growing Bank Unraveled

Ueno is a digital bank owned by Grupo Vázquez, rebranded from a decades-old finance company called Financiera Ueno. It won its banking license in 2023 and expanded quickly, with dozens of locations, a fluorescent-green brand, cash-back promotions and sponsorships of top football clubs and the national stadium. Euronews reported that it claimed more than 60 percent of Paraguayan adults as customers.

According to the reporting, regulators found poorly documented lending and expenses wrongly booked as assets. Once corrected, the bank’s capital fell roughly half below the legal minimum. Ueno had also extended large sums to companies tied to its owners, beyond legal limits and without sufficient collateral. In one day in September 2025, nearly $39 million reportedly went to three companies linked to Ueno’s owners. Local outlet ABC Color, cited by Euronews, reported that central bank inspectors flagged risky insider lending as early as June.

Euronews further reported that the Superintendency of Banks concluded the bank could not meet a $70 million legal reserve requirement, despite a recently announced $100 million capitalization plan.

Public Money at Stake

The damage extends well beyond individual savers. Euronews reported that roughly $800 million to $850 million in public deposits, around a quarter of Ueno’s total, sat in the bank, including money tied to the state pension and health funds and dam operators. Paraguayan law reportedly guarantees each client’s deposits up to 75 minimum wages, about 228 million guaraníes or roughly $37,700, but the sheer scale of the failure has raised questions about how the guarantee fund will cope.

On Wednesday, eight senior Ueno executives were arrested, including CEO Miguel Vázquez. The reports reviewed did not name charges against them. Peña, who had stayed silent most of the day, then posted online that the head of the central bank was leaving his post and urged the courts to establish responsibility.

The President’s Ties Under Scrutiny

Critics zeroed in on Peña’s own connections. Euronews reported that he held a stake in Ueno’s holding company until last year and that he appointed Carlos Carvallo, president of Financiera Ueno, to run the central bank, the very agency supervising the bank. As recently as last month, Peña had dismissed warnings about the bank as a smear campaign, according to the report.

Lawmakers had moved to impeach him on grounds including poor performance of his duties, conflict of interest, alleged embezzlement of pension funds and institutional protection of the central bank. Thirty-five legislators requested an extraordinary session to vote on the charges. Reports differ on whether the Chamber of Deputies voted after his resignation; Euronews carried both versions in separate stories, and USA Herald is treating the timing as unconfirmed.

In his video, Peña said he was stepping down for “the stability of our country, social peace and the need to preserve our democratic institutions.” He added, “I want to apologise to the people if at any point I failed. It was never my intention to betray the trust you placed in me.” Euronews noted he expressed contrition but did not accept responsibility for the crisis.

Economic Shockwaves and Fear of a “Corralito”

Paraguay had been prized by foreign investors for its stability and had enjoyed strong growth under Peña, a close ally of President Donald Trump, according to Euronews. Now business groups are sounding alarms. The Association of Importers and Traders warned of an immediate 35 percent slump in sales at major retailers as domestic consumption stalled. Crowds outside bank branches have revived fears of an Argentine-style “corralito,” the 2001 freeze on withdrawals that devastated that country’s economy.

Ruling-party deputy Alejandro Aquilera, speaking during the impeachment debate, said more than three million Paraguayans “have been harmed” and feel “betrayed, swindled, deceived.” Protester Luis Pineda put it more bluntly: “Santiago Peña and the Colorado Party have stolen all our savings.”

What Comes Next

The immediate questions are practical: when depositors will regain access to their money, how much the government will have to backstop, and whether the arrests widen to regulators and political figures. For Latin America, the episode is a warning about the speed at which a heavily marketed digital bank can implode, and how quickly a president’s fortunes can follow. Neither article reviewed reported any official U.S. government response. USA Herald will update this story as the transition and the investigation develop.

Reporting based on accounts from Euronews. Some figures differ between reports and are noted above.