Paraguay Senate opened an impeachment trial after President Santiago Pena offered to resign, in the formal next step of a crisis that began when the central bank seized Ueno Bank on Tuesday. The Senate move followed days of protests in Asuncion, the detention of eight senior bank executives, and the collapse of support for Pena inside his own conservative Colorado Party. Lawmakers in the lower house had already voted 78 to 0 to impeach him minutes after his resignation announcement, sending the charges to the Senate for trial.
Why it matters
The sequence matters, because it shows a constitutional process working under extreme pressure. Pena offered his resignation in a video posted to X, saying he was stepping down to preserve the country stability and democratic institutions, and he said he would appear before the Senate proceedings to exercise his right to a defence. Congress called an extraordinary session of both chambers to decide whether to accept the resignation or to reject it and proceed with the impeachment process. Either path leads to the same practical outcome, with Vice President Pedro Alliana set to take office, but the choice between them matters for the record and for the law.
The charges against Pena centre on his ties to the bank at the heart of the crisis. Lawmakers accused him of conflicts of interest, misuse of pension funds and institutional cover ups linked to the collapse of Ueno Bank, which had grown in less than five years from a niche fintech into a mid sized bank serving around three million customers. Pena had been a business partner of Grupo Vazquez, the conglomerate that controls the bank, until March 2025, and he appointed a former president of the bank predecessor to run the central bank that supervises it. Those facts, rather than any single transaction, are what turned his own party against him.
What happens next
The human cost of the crisis is measured in frozen accounts. The central bank seized the lender after finding its solvency ratio had fallen below half the 12 percent regulatory minimum, and it announced plans to move customer accounts to other banks before liquidating what is left. The bank claimed more than 60 percent of Paraguay adults as customers, and its app, cards and transfers went dark, leaving depositors lined up outside locked branches. The central bank has announced phased repayments, but for families who need their savings now, a phased plan is cold comfort.
What happens next will be decided in two places at once: the Senate chamber, where the trial will test whether the impeachment process runs its course even after a resignation, and the streets and bank branches, where depositors will judge the new government by whether their money comes back. Alliana inherits a financial crisis, a political crisis and a currency that fell nearly 5 percent in a day. The trial will settle the question of Pena responsibility. The repayments will settle the question of whether the state can protect its citizens savings.
