Paraguay crisis: Congress refuses President Peña's resignation and moves to impeach him over bank collapse

Paraguay's President Santiago Peña has offered to resign over the collapse of a digital bank, but lawmakers refused to accept his resignation and have started impeachment proceedings instead.

The crisis centres on Ueno, a digital lender used by nearly half of all Paraguayans. The central bank said it had fallen below the legal solvency level, and many customers, including pensioners, have been unable to get their money.

Peña once held shares in Ueno's parent company, Grupo Vazquez, and lawmakers accuse him of a conflict of interest. He says he sold the shares in 2025, and that he offered to step down to protect stability and democratic institutions.

A joint session of Congress could not accept the resignation after members of his own Colorado Party walked out. If he is impeached and removed, he would lose the life seat in the Senate and the legal immunity that normally come with leaving office, and Vice President Pedro Alliana would be expected to take over.

The attorney general has opened three criminal investigations, and the head of the central bank has resigned. Ueno managed close to $850 million in public funds.