Paraguay’s Largest Digital Bank Collapses, President

The president of the South American country of Paraguay, Santiago Peña, resigned on Thursday following a banking crisis that left the savings of approximately three million people inaccessible. Thousands of angry citizens took to the streets to protest against the president. The frozen deposits also included money belonging to elderly people and pensioners.  Two days earlier, Paraguay’s Central Bank had taken control of Ueno Bank, which was facing a severe shortage of funds. The Central Bank said the move was necessary to protect depositors’ savings and safeguard the country’s banking system.

The banking crisis has triggered widespread public anger. On Thursday, thousands of demonstrators gathered outside Parliament, chanting, “Give us our money back.” Earlier protests had also resulted in clashes between police and demonstrators. Police fired tear gas and used water cannons to disperse the crowds. The crisis has severely affected numerous families. Andrés Maldonado, a 21-year-old student, said his family had been left without any money. Calling the president a criminal, he said Peña should be sent to prison. Nadia González, 26, said the bank had approved a loan to help her purchase her first home but had failed to release the funds. As a result, she now has nowhere to live. Long queues of customers seeking to withdraw their money were seen outside bank branches on Tuesday and Wednesday.

Meanwhile, lawmakers unanimously voted on Thursday to initiate impeachment proceedings against President Peña. He has been accused of making improper decisions concerning the bank and using his position to advance personal interests. Peña had owned shares in the business group that controlled Ueno Bank, although he sold his shares last year. As the crisis deepened, President Peña asked Central Bank Governor Carlos Carvalho to resign. Carvalho subsequently stepped down. Peña also promised to return depositors’ money within five days, but the pledge failed to ease public anger.

Amid the deteriorating situation, the president announced his resignation in a video posted on social media. He said he had never intended to betray the public’s trust. He added that his top priority was to provide relief to people who had deposited their savings in the bank. It is worth noting that Parliament convened a special session on Thursday to decide on the president’s resignation. However, no decision could be reached because the required number of lawmakers was not present. Parliament subsequently decided to begin impeachment hearings on Friday morning. Following Peña’s resignation, Vice President Pedro Eliana is expected to assume presidential responsibilities.