The collapse of Paraguay’s Ueno Bank and the political crisis surrounding President Santiago Peña represent another setback for US Secretary of State Marco Rubio’s strategy to strengthen Washington’s influence in Latin America.
Just two weeks before t
he crisis, Peña was promoting Paraguay’s economic performance in Washington, presenting the country as a regional success story and a reliable partner for the administration of President Donald Trump. However, the sudden collapse of Ueno Bank has severely damaged that image, triggering financial uncertainty, public protests and a political confrontation that ultimately led to Peña’s resignation on November 5, 2026. Skimify News+1
Ueno Bank, one of Paraguay’s largest digital financial institutions, served approximately 3 million customers, representing around 60% of the country’s adult population. The institution also managed between US$800 million and US$850 million in public funds, including resources connected to the country’s pension and healthcare systems.
On November 3, Paraguay’s Central Bank intervened in the institution after its solvency ratio fell below half the legally required minimum. The intervention left millions of customers temporarily unable to access their accounts, savings and financial services. Authorities also initiated investigations into suspected financial irregularities, while several bank executives faced arrest warrants. AP News+1
The political consequences were immediate. Peña faced impeachment proceedings, growing opposition and criticism over his previous business connections to the bank’s controlling group. He denied wrongdoing and said he would cooperate with investigations.
For Washington, the crisis carries broader geopolitical implications. Paraguay is strategically important because it maintains diplomatic relations with Taiwan rather than China, making it a key US partner in South America. Rubio has promoted closer security and political cooperation with Asunción as part of Washington’s efforts to counter Beijing’s regional influence.
Peña’s departure therefore creates uncertainty for a US strategy that relies on politically stable governments and dependable regional allies. Although Vice President Pedro Alliana is positioned to succeed him, the banking scandal has exposed vulnerabilities in Paraguay’s institutional oversight and raised questions about the durability of Washington’s political partnerships in Latin America.
