Paraguay's President Santiago Peña resigned on Thursday after the collapse of digital lender ueno left about three million customers — nearly half the country's population — unable to access their savings, triggering a political crisis.

Mr. Peña, 47, announced his decision in a video posted on social media. "I have made the decision to submit my resignation from the Presidency of the Republic. I do so with the stability of our country, social peace, and the need to preserve our public institutions in mind," he said, adding an apology to Paraguayans "if I have failed them at any point".

How the bank collapsed

Ueno, which marketed itself as "the bank for everyone" after receiving its licence in 2023, had grown rapidly into Paraguay's fifth-largest bank by assets, with around three million customers in a country of about 6.5 million people. It also administered close to $850 million in public funds, including pension money.

On Tuesday, Paraguay's central bank intervened after finding that ueno's solvency ratio had fallen to 5.56 per cent, less than half the 12 per cent regulatory minimum, after adjustments to its financial statements. The bank was put into resolution, and all of its services, from cash withdrawals to debit card payments, were immediately blocked.

Peña's links to the bank

Mr. Peña, an economist who took office in August 2023, has faced scrutiny over his past business ties to Grupo Vázquez, the conglomerate that controls ueno. He has said he was a shareholder in the group until March 2025, when he sold his stake, and he has denied any wrongdoing. Opposition lawmakers have accused him of conflict of interest, misuse of pension funds and an institutional cover-up.

The central bank chief, Carlos Carvallo, who had previously headed the digital lender, resigned on Tuesday after the bank was put into resolution. The Attorney General has opened three criminal cases related to the bank's failure, and prosecutors have issued arrest warrants for eight ueno executives.

Impeachment and what happens next

Mr. Peña's resignation came as lawmakers debated impeachment proceedings brought by 35 opposition and ruling-party dissidents. Soon after his announcement, the Chamber of Deputies voted unanimously to trigger proceedings, accusing him of "serious and systematic dereliction of duty". The Senate trial began on Thursday night and was expected to continue on Friday.

Congress must now decide whether to accept the resignation — which would give Mr. Peña a lifetime Senate seat and immunity — or to remove him from office, which would leave him open to prosecution. Vice President Pedro Alliana is constitutionally in line to succeed him.

Angry protests swept the capital, Asunción, this week, with demonstrators carrying banners reading "give us our money back". The central bank says it is working to transfer ueno customer accounts to other financial institutions, though the process has strained the banking system and caused outages at several banking apps. For millions of Paraguayans, the immediate question is when they will be able to reach their money again.