Paraguay’s Senate on Friday impeached President Santiago Peña and removed him from office, hours before prosecutors placed the ousted leader under house arrest. The dramatic move followed the collapse of digital lender Ueno Bank, which froze the accounts of roughly 2.9 million customers—about 60 percent of the country’s adult population—and triggered widespread protests and a deepening political crisis.
All 44 senators present voted to convict Peña of misconduct in office, or “dereliction of duty.” One senator was absent. Vice President Pedro Alliana was sworn in shortly afterward as Paraguay’s new president and will serve out the remainder of the term, which ends in August 2028.
Peña, 47, had offered his resignation on Thursday in a bid to retain the parliamentary immunity and lifetime Senate seat normally granted to former presidents under Paraguay’s constitution. Lawmakers rejected the resignation and pressed ahead with impeachment proceedings that had been initiated earlier in the week by the Chamber of Deputies. The impeachment stripped him of those protections and left him subject to ordinary criminal courts.
Minutes after the Senate verdict, prosecutors ordered Peña confined to one of his homes in Asunción. He is due to appear for questioning on Saturday on allegations including breach of trust, influence peddling, and misappropriation of funds. Prosecutor Silvia Margarita Gonzalez Vester and others confirmed he cooperated with authorities. An arrest warrant was also issued for Carlos Carvallo, the former Ueno executive whom Peña appointed as central bank president.
Ueno Bank was suspended earlier this week amid a solvency crisis. The central bank’s intervention left millions of Paraguayans unable to access savings or make even basic purchases, sparking anger and some violent clashes with police. Protesters gathered outside Congress and near Peña’s residence as the political drama unfolded.
Impeachment charges accused Peña of conflicts of interest stemming from his past ownership of shares in the company that controlled Ueno (which he held until 2025), manipulation of regulatory oversight, diversion of pension funds into the bank, and participation in an institutional cover-up involving the central bank. Prosecutors have opened investigations into illicit enrichment, money laundering, and related offenses. Peña has denied wrongdoing, describing the matter as a regulatory issue.
The crisis marks a rapid fall for Peña, a Colorado Party leader and economist who took office in 2023. He had been regarded as one of the more stable presidents in the region and a close ally of U.S. President Donald Trump. Analysts described the scandal as one of the largest corruption cases since Paraguay’s return to democracy after the Stroessner dictatorship. Alliana, a longtime Colorado Party figure and former president of the Chamber of Deputies, now faces the task of stabilizing the financial system and restoring public confidence.
Peña is the second Paraguayan president to be removed by impeachment since the end of military rule in 1989. Authorities continue to investigate the full scope of the bank’s collapse and any broader political involvement as depositors await the return of their funds.
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