Paraguay’s rightwing president Santiago Peña was placed under house arrest minutes after Congress impeached him on Friday. The move came after a banking disruption left more than half the country’s population unable to access their bank accounts.
Peña faced investigation over allegations that he used political influence to favour Ueno. This digital lender expanded exponentially during his administration before regulators suspended it this week over financial irregularities.
The shutdown froze accounts belonging to 2.9 million people. This figure represents about 60 percent of the adult population in Paraguay, leaving citizens unable to pay for basic purchases such as bread and water.
Demonstrations erupted across the country, with some protesters clashing with police. Impeachment proceedings began on Wednesday and concluded on Friday, just moments before authorities ordered Peña’s detention.
Pedro Alliana, the vice-president, was sworn in as the new leader. Outside Peña’s home, a public prosecutor accompanied by police informed local media that the former president was under house arrest.
The public prosecutor’s office opened a formal investigation into Peña on Thursday. He is suspected of illicit enrichment, money laundering, and influence peddling.
Peña, a regional ally of US President Donald Trump, attempted to resign on Thursday. His resignation bid aimed to secure special jurisdiction as a senator for life, a status granted to former presidents in Paraguay. Lawmakers rejected the move, leaving him subject to ordinary courts.
The 47-year-old economist did not appear before Congress during the impeachment session, leaving his defence to lawyers while addressing the public on social media. Rumours had circulated that he fled to Argentina.
Before the conclusion of the impeachment and the issuance of the arrest warrant, Peña posted a statement on social media. He wrote that he said goodbye with gratitude while fully recognising the anguish of those waiting for answers.
Shortly after taking office, Peña appointed Carlos Carvallo Spalding, a former CEO of Ueno, as the head of the central bank. Spalding subsequently permitted Ueno to operate as a digital bank, propelling it into one of the largest deposit-holders in the country. Spalding is also named in the arrest warrant alongside Peña.
Peña held about one million dollars in shares purchased in 2019 in a firm that later became Ueno Holding. He retained the shares after becoming president and only disposed of them in April 2025, describing himself purely as an investor.
Political analyst Hugo Duarte stated that government-linked pension funds deposited money into Ueno due to presidential backing. An estimated 800 million to 860 million dollars in state and pension funds were invested in the lender.
Retail sales dropped by as much as 80 percent as the population lost access to their funds, leading Peña to lose the backing of his own political party. During the impeachment session, opposition senator Rafael Filizzola described the situation as one of the biggest corruption scandals since the return of democracy.
