Paraguay Senate begins impeachment trial of President Santiago Pena; resignation not yet accepted

Paraguay in South America is in a major political crisis. Impeachment proceedings have begun against President Santiago Pena following the financial troubles of a digital bank called Ueno. The Senate began hearing the case on Friday, sharpening the struggle for power in the country. Pena has resigned, but the resignation has not yet been formally accepted.

The matter began with action by the central bank against the Ueno digital bank. The regulator's inquiry found that the bank had not met minimum financial stability standards. The action affected transactions and access to money in the accounts of about 3 million customers. Many depositors had trouble using their savings. Economic and political instability then spread through the country.

President Pena earlier had business ties with Ueno's parent company. He has clarified that he sold his stake in March 2025. Opponents have nonetheless raised questions about those ties. Serious allegations have been made over the bank's crisis, including conflict of interest, influencing the regulator and use of public funds. Pena has rejected the allegations of wrongdoing.

On Thursday, Paraguay's lower house approved the impeachment motion by 78 votes to none. A special sitting of the Senate was then called on Friday. Pena's legal team had sought an extra 72 hours to prepare its defence, but the Senate rejected the request by 39 votes to 3.

Pena's side claimed that it received the charge sheet and accompanying documents late and so did not get full time to prepare a defence. Opponents, for their part, held to their stand on pushing the impeachment process forward. The charges include conflict of interest, irregularities in the use of pension funds and suspicion of suppressing information about the bank's financial condition.

Pena announced his resignation on Thursday. However, Parliament has not accepted it, so Vice-President Pedro Alliana has not yet taken charge as President. This has left uncertainty over the leadership. If Pena is found guilty in the impeachment, he could lose the lifetime Senate membership and parliamentary protection that a former President receives.

Meanwhile, depositors' protests continue in the capital, Asuncion. They demand that the money stuck in the bank be returned and that those responsible for the crisis face action. Legal action is under way against senior officials of the bank, and the head of the central bank has also had to step down. Paraguay's economic crisis has thus turned directly into a political fight for power.