Aliana sworn in as Paraguay president after Peña's ouster

Pedro Aliana was sworn in as the new president of Paraguay on Friday, at a time when authorities imposed house arrest on his predecessor Santiago Peña, who was removed from office, in the latest developments of a rapidly evolving political and financial crisis triggered by the collapse of a digital bank.

Prosecutors stated outside Peña's home in "Asunción" that charges are still being determined but may include abuse of power.

An order was issued for Santiago Peña to appear at the Attorney General's office on Saturday morning, according to Reuters.

Peña had been removed from the presidency about an hour earlier following a unanimous vote in the Senate, where members cited questions regarding his previous ties to the digital bank "Aiono," which collapsed and provided banking accounts to nearly half of Paraguay's population.

Although Peña submitted his resignation on Thursday, the Senate chose to proceed with impeachment proceedings to remove him rather than accept the resignation, and swiftly installed his deputy Aliana.

By the time of his arrest, dozens of protesters had gathered outside Peña's residence. Police established a security cordon around the area.

The turmoil began last week when Paraguay's Central Bank intervened in the affairs of "Aiono" bank, whose clients included many individuals who previously did not have bank accounts.

The bank had grown rapidly since its launch in 2021. However, questions emerged regarding its lending practices and its relationships with Paraguay's political and financial elite, including Peña, who until last year was a shareholder in Aiono's holding company, and Central Bank President Carlos Carvallo, who headed Aiono until 2023.

Prosecutors also issued an arrest warrant for Carvallo on Friday, who had resigned earlier this week as authorities began final attempts to prevent the bank's dissolution. Eight former senior executives of "Aiono" have already been detained.

Others from Peña's inner circle also resigned, including the Interior Minister, the Chief of Staff, and two of his advisors.

The impeachment charges leading to his removal stated that Peña was involved in conflicts of interest, regulatory manipulation, diversion of pension fund money, and participation in an institutional cover-up involving the Central Bank.

Peña denied any wrongdoing and said the case concerns a regulatory matter. The Central Bank denied any conflict of interest, noting that Carvallo recused himself from making any decisions related to "Aiono" bank.