Pedro Alliana has been sworn in as Paraguay's new president, hours after the Senate impeached his predecessor Santiago Peña over the collapse of a digital bank holding accounts for nearly half the country's population.

Alliana, 52, took the oath on Friday to become the country's 53rd president. He had been vice president under Peña since 2023 and will serve out the term through August 2028.

The Senate voted 44 of 45 members present to remove Peña, citing questions over his links to the collapsed bank, ueno. The vote strips him of parliamentary immunity, and the Attorney General has opened three criminal cases against him.

Peña under house arrest

Authorities placed Peña under house arrest soon after the vote. Prosecutors said charges were still being determined but could include influence peddling and breach of trust; he stays under house arrest until a judge rules, prosecutor Christian Benítez said.

Peña had offered to resign on Thursday, but Congress refused, preferring impeachment; the lower house had voted 78-0 to impeach him.

The bank collapse behind the crisis

The crisis erupted early on Tuesday, when the central bank said ueno had fallen below the legal standards for solvency. Regulators seized the lender, transferring its remaining assets to other banks.

Ueno had about 2.9 million customers in a country of 6.1 million, and its failure cut millions off from accounts and pension payments. The central bank found its solvency ratio had fallen below 50% of the required minimum.

Prosecutors have charged 27 people, including controlling shareholder Miguel Vázquez, with breach of trust and attempted fraud. Impeachment charges alleged Peña had conflicts of interest, manipulated oversight, diverted pension funds and took part in a central bank cover-up. About $355 million in state pension funds had been deposited with ueno, above the legal limit.