Paraguayan President Santiago Peña announced his resignation on local time yesterday (5th) as he faced the threat of impeachment over conflict-of-interest allegations linked to a major digital bank insolvency crisis.

However, as the legislature failed to decide whether to accept his resignation, Peña remains in office, and impeachment proceedings are expected to continue in the Senate.

According to Reuters and Spain's EFE news agency, Peña said in a video posted on his social media yesterday, "I have decided to resign with the thought that we must protect national stability, social peace, and democratic institutions."

He went on to apologize if he failed to meet public expectations, while emphasizing that he never intended to betray the trust placed in him by the citizens.

Peña took office in August 2023, and his original term was set to run until August 2028.

However, the parliamentary vote to decide whether to accept Peña's resignation took an unexpected turn.

According to major Paraguayan daily ABC Color, ruling party lawmakers walked out of a joint session of the Senate and Chamber of Deputies on local time the 5th while a vote was underway on accepting the president's resignation, failing to meet the quorum and rendering the session void.

ABC Color reported that ruling party lawmakers appeared to have left the chamber after concluding that they would not secure the necessary votes in favor of accepting the resignation.

As a result, Peña's resignation was not accepted, allowing him to retain the presidency under the constitution.

Not only opposition figures but also some lawmakers within the ruling party urged the Senate to swiftly deliberate the impeachment, arguing that the president must be held legally accountable.

Ruling party Senator Gustavo Leite stated that once Senate leadership sets the schedule for the impeachment trial, they intend to proceed as quickly as possible.

Under the Paraguayan Constitution, the Chamber of Deputies brings impeachment charges against the president, while the Senate conducts a trial to decide whether to remove him from office.

While a resigning president in Paraguay can obtain the status of a senator for life, this status is not granted if they are found guilty and removed through an impeachment trial.

Consequently, the Senate trial outcome is expected to have a massive impact on Peña's future legal standing.

Previously, the push to impeach Peña gained major momentum as support spread from opposition circles to the ruling party itself.

On the 4th, impeachment against Peña was pursued primarily by opposition lawmakers, and by the 5th, even members of the ruling Colorado Party, officially named the National Republican Association (ANR), shifted to support the impeachment.

Notably, former president and ruling party leader Horacio Cartes also expressed support for impeachment, sharply narrowing Peña's political foothold.

According to official announcements from the Paraguayan Chamber of Deputies, all 78 attending lawmakers voted in favor during an extraordinary session held yesterday, passing the impeachment motion against Peña.

Meanwhile, the impeachment motion against Vice President Pedro Alliana was voted down with 30 votes in favor and 48 against.

The current crisis was triggered when insolvency came to light at Ueno Bank, a major digital bank in Paraguay.

The Central Bank of Paraguay determined on the 2nd to initiate bank resolution procedures after confirming that Ueno Bank's solvency indicators had fallen to less than half of the legal minimum standards.

This caused financial turmoil to spread as customers faced difficulties withdrawing deposits and processing payments.

To protect depositors, the central bank initiated procedures to pay out guaranteed deposits, deciding to first disburse funds to customers whose deposits are 10 million guaranies or less and who hold accounts at other financial institutions.

According to Reuters, Ueno Bank has about 3 million customers and has managed approximately 850 million dollars in public funds.

This included funds from public institutions such as Paraguay's national pension fund, amplifying public concern over the bank's insolvency.

Ueno Bank launched as a digital financial firm in 2021 and grew rapidly, obtaining a banking license at the end of 2023 after Peña took office.

Conflict-of-interest suspicions arose as it was revealed that Peña previously held stakes in the parent company of Ueno Bank and had appointed a figure connected to the bank as the central bank governor.

As criticism regarding responsibility for the bank insolvency spread, consecutive protests by depositors and citizens broke out in the capital of Asunción.

Amid these developments, a criminal investigation into President Peña has also been launched.

According to major Paraguayan daily ABC Color, prosecutors have formed a dedicated investigative team consisting of prosecutors specializing in economic crimes and anti-corruption to probe Peña's alleged ties to Ueno Bank.

Prosecutors are investigating suspicions surrounding bank supervision, insolvency handling, and the process of depositing public funds.

However, Peña has denied allegations of illegal activity, stating that he will exercise his right to defense and cooperate fully with related investigations.

(Photo: Yonhap News)