Paraguay seizes Ueno Bank, and its president is removed

About 3 million Ueno Bank customers have been cut off from savings, pension payments and other money after Paraguay seized the lender over insolvency. Ueno said that customer count represented roughly 60% of the country's adult population, which is an unusually large share of a country to leave staring at a banking app that no longer works.

The central bank took control of Ueno after finding its capital had fallen below the legal solvency requirement. Once the bank's books were corrected, its capital was less than half the required minimum, according to reports. The seizure prompted protests in Asunción and elsewhere as customers tried to figure out what had happened to money they needed for ordinary life.

The money at stake: Ueno had grown rapidly after receiving authorization to operate as a digital bank in late 2023. Before its collapse, it held roughly $800 million to $850 million in public and pension funds. Al Jazeera reported that about $355 million in state pension money had been invested in the bank.

Why the president fell: Santiago Peña had owned shares in Ueno's parent company, Grupo Vázquez, before becoming president. He said he sold them in 2025 and denied wrongdoing. Lawmakers accused him of conflicts of interest, failures of regulatory oversight and an institutional cover-up connected to the bank. On Thursday, Peña offered to resign, apologizing if he had failed the public, but Congress declined to simply let him go.

The Chamber of Deputies voted 78-0 to impeach him. On Friday, the Senate removed him in a 44-0 vote, with the remaining senator reported as absent or abstaining. Vice President Pedro Alliana was sworn in to serve through 2028. Peña was then placed under house arrest as prosecutors investigate allegations including breach of trust, influence peddling and misappropriation of funds.

The immediate problem: A law passed this week requires the state deposit-guarantee fund to start repaying eligible small depositors within five business days, NPR reported. It covers up to about $36,000 per customer, but the larger question is how quickly customers can actually regain access to the money that disappeared from their daily lives when Ueno was shut down.

Peña was expected to face questioning by prosecutors on Saturday, while Ueno customers wait for the resolution process to turn frozen balances back into usable money.