On Thursday, Paraguay’s president went on video to say he was stepping down. Within minutes, the lower house voted 78-0 to impeach him. By the end of the day, the country had a president who had said he was leaving, a Congress that had not agreed to let him go, and a bank that more than 60% of its adults had trusted with their money, shut and silent.

The crisis around Santiago Peña began with that bank. Its collapse has reached the presidency, the courts and the country’s financial standing in the span of a few days.

How a digital bank went dark

On Tuesday, 3 November, Paraguay’s central bank announced it was seizing Ueno Bank. Regulators had found lending that was poorly documented and expenses that had been counted as assets. Once those were corrected, the bank’s capital came to less than half the legal minimum.

Customers felt it immediately. The app, the cards and the transfer system stopped working, and the branches closed. For a lender that had built its brand on convenience, the shutdown was total.

The scale is what makes this a national event rather than a banking story. Ueno claimed more than 60% of Paraguay’s adults as customers, which turns a failed lender into a freeze on everyday payments and savings. The bank also held roughly $800 million in public deposits, about a quarter of its total as of last month. That money included state pension and health funds as well as deposits from the operators of the country’s hydroelectric dams, according to AP reporting carried by PBS.

The political fallout moves fast

Opposition lawmakers filed impeachment articles on 4 November, alleging conflicts of interest, misuse of pension funds and cover-ups. The accusations pointed toward a relationship that critics say was too close. Peña held a stake until last year in a company linked to Ueno. He also appointed Carlos Carvallo, a former president of Ueno’s predecessor lender, to run the central bank.

The timeline adds to the pressure. ABC Color reported that central bank inspectors found risky insider lending in June, and Peña was still defending Ueno last month. Carvallo has since resigned at Peña’s request.

Then came Thursday. Peña announced his resignation in a video, and the lower house moved to impeach him almost at once, sending the charges to the Senate. Peña has said he will answer them “with arguments and evidence,” according to CNN.

A resignation that is not yet a resignation

The next step did not go as the opposition or the president may have expected. A joint session convened to accept Peña’s resignation lost its quorum when lawmakers from the Colorado Party walked out. Without a quorum, the resignation was not accepted, as Al Jazeera and the outlet Democrata both reported.

So the Senate was set to resume the impeachment trial on Friday, 6 November, with Peña still formally in office. Removing him requires 30 of the Senate’s 45 members.

If he is removed, Vice President Pedro Alliana would take over until August 2028. At the time of writing, there is no result from Friday’s session.

One legal question hangs over the process: whether a president who resigns keeps lifetime senator status and the protections that come with it. That is the opposition’s argument, and the issue is part of why the manner of Peña’s exit matters as much as the fact of it.

The criminal cases

The impeachment is only one track. Attorney General Emiliano Rolón Fernández has ordered three criminal investigations, including allegations involving Peña and other current and former officials.

The cases against the bank’s leadership are further along. A judge ordered six Ueno executives jailed pending trial, among them founder Miguel Vázquez and president Juan Manuel Gustale. Two others were placed under house arrest. Prosecutors have charged 27 bank officials and associates with breach of trust and attempted fraud.

These are allegations, not findings. Peña says he will cooperate with the investigations, and Gustale’s lawyer disputes the charges against his client.

What happens to the people with money in Ueno

For ordinary customers, the most pressing question is whether they will get their money back. The deposit guarantee fund insures up to about $36,000 per customer. The central bank says that covers the full balances of an estimated 97% of clients.

Payouts begin with the smallest accounts, those of up to about $1,600, and all are due within five business days. The process is expected to run through about 11 November.

The Labor Ministry estimates that about 7,000 direct and indirect jobs are affected, a reminder that the bank’s reach extended well beyond its depositors. Ueno grew from a rebranded finance company, which won its banking license in 2023, to more than 70 locations, and it sponsored the national soccer team and the main stadium.

Why markets and Washington are watching

The collapse also lands on a government that had been enjoying good news abroad. Peña was welcomed in Washington only weeks ago, and Paraguay recently earned investment-grade ratings. After news of the resignation, the country’s sovereign bond prices fell, according to reports from AP and NBC News.

That is the larger stake here. A government that had been presenting itself as stable now faces a question investors take seriously: whether the institutions that were supposed to oversee a fast-growing bank can be trusted to handle the fallout.

What to watch next

The immediate test is the Senate. Whether it reaches the 30 votes needed to remove Peña, and what that means for his resignation and any protections he might claim afterward, will shape the rest of the crisis.

After that, attention turns to the courtroom. The three criminal investigations and the trials of the Ueno executives will determine who answers for the bank’s failure, and how far up the accountability reaches. For the many Paraguayans who woke up to a dead banking app this week, that answer matters as much as anything said in Congress.