Ueno Bank failure prompts resignation of Paraguay's president
The downfall of digital lender Ueno Bank has forced Santiago Peña to vacate the presidency as questions intensify regarding his previous business connections to the bank's controlling entity, stranding countless depositors without fund access.
The president of Paraguay, Santiago Peña, declared his decision to resign on Thursday as a growing political upheaval stemming from the failure of Ueno Bank, a digital financial institution, intensified throughout the nation.
Through a video message shared on X, Peña stated his decision to relinquish the presidency was made to safeguard the nation's stability, maintain social peace and uphold democratic institutions. He emphasized that his foremost concern was ensuring protection for Paraguayan citizens who had placed their savings within the financial system.
On Tuesday, the central bank of Paraguay initiated resolution proceedings targeting Ueno Bank following a determination that the institution's solvency ratio had dropped to less than half the required regulatory threshold.
Growing political pressure descended upon Peña due to his past commercial connections with Grupo Vázquez, the corporate conglomerate that maintains controlling interest in Ueno Bank. According to AP, he continued as a business partner within the group through March 2025.
Peña has refuted allegations of misconduct, maintaining that what originated as a regulatory issue subsequently transformed into a political controversy.
The financial institution's crisis unfolded alongside unusual price premiums for Tether's USDt observed on Bybit's peer-to-peer marketplace serving Paraguay. A listing reviewed during the early hours of Thursday displayed USDt priced at 6,942 Paraguayan guaraníes, representing roughly 13% higher than the Nov. 4 dollar reference rate of 6,144.02 guaraníes per US dollar published by the central bank.
The resignation occurred while members of the legislature engaged in discussions regarding impeachment proceedings centered on accusations including conflicts of interest, improper handling of pension funds and institutional concealment connected to Ueno Bank's failure, Reuters reported.
Elected during April 2023 and assuming office in August of that year, Peña was in the process of fulfilling a five-year presidential term that was set to conclude in 2028. Paraguay's constitutional framework stipulates that Vice President Pedro Alliana would assume the presidency for the duration of the remaining term should Congress approve his resignation.
This is a developing story. We will update this article as more information becomes available.