The demonstrators gathered outside Congress, opposing Peña's resignation because they feared it would allow him to gain immunity as a senator for life.

The protest turned tense after lawmakers suspended a congressional session intended to consider the president's resignation.

Most legislators walked out, leaving the session without the quorum required to proceed with a vote.

Following the announcement, police dispersed demonstrators using tear gas, rubber bullets and water cannon trucks.

The protests followed the Central Bank's takeover of Ueno Bank on Tuesday after regulators found that its solvency ratio had fallen below half the legal minimum.

The intervention froze deposits belonging to approximately 2.9 million customers, along with between $800 million and $850 million in public funds, according to the bank.

For some customers, the restrictions have affected their ability to meet basic needs.

Lorena Simón, who said she was unemployed, described the difficulties she faced after losing access to her savings.

"I want my savings. I have 14 million [guaraníes, about 2,300 USD] in savings and I can't withdraw it. I'm out of work, I have nothing to eat", she said.

Another protester, Rosana González, warned that the consequences of the banking crisis could extend beyond those whose deposits had been frozen.

"We were all victims of this situation and we will continue to be victims because this is going to affect the economy . Those responsible for this great robbery have to pay, and they have to pay dearly before the courts", she said.

Questions have also emerged over Peña's previous involvement with the bank.

Protester David Gonzalez questioned the institution's rapid growth and the president's past business ties.

"The president was a partner in a bank. He didn't step away until 2025. How can a bank that didn't exist three years ago suddenly be number one?", he asked.

Opposition lawmaker Guillermo Rodríguez argued that investigations into the crisis should extend beyond the president to others who may have been involved.

"There are people who covered this up, there are accomplices, there are people who benefited from this. This is only just beginning", he warned.

Later on Thursday, Peña announced on social media that he would appear at the impeachment trial and exercise his right to a defence.

The Senate, which serves as the court in impeachment proceedings, was subsequently called to an extraordinary session to consider the charges.

Meanwhile, the first payments to affected depositors were scheduled to begin on Friday.