Paraguay’s Senate voted unanimously to impeach President Santiago Peña, removing him from office in a historic decision.

Minutes after the impeachment vote, prosecutors ordered Peña’s arrest at his private residence and placed him under house arrest.

The impeachment follows the sudden collapse of Ueno Bank, a digital lender that was seized by regulators after critical solvency deficiencies were uncovered.

Ueno Bank’s failure has frozen the financial assets of almost three million Paraguayans, roughly half the nation’s population and 60 percent of adults.

Prosecutors have charged 27 bank executives, including founder Miguel Vázquez, with breach of trust and fraud for channeling uncollateralised loans into private conglomerates.

Lawmakers allege Peña held significant shares in Ueno’s parent company until early 2025 and directed over $800 million of public funds, including health‑care and pension assets, into the bank.

Vice President Pedro Alliana was sworn in as the country’s 53rd president to serve the remainder of the term until 2028.

In his first address, Alliana pledged full compensation for families affected by the financial disaster and announced an emergency fund to release trapped money.

The Central Bank’s emergency guarantee fund began payouts, prioritising low‑income depositors with balances up to about $1,600 and no outstanding debts to Ueno.

Paraguayan deposit insurance covers up to roughly $36,000 per customer, and officials say the fund can fully cover 97 percent of Ueno’s customers.

Authorities maintain that the Ueno collapse is an isolated fraud case and that the broader banking system remains liquid and stable.