Tether Abandons Uruguay Bitcoin Mining Venture Amid Energy Dispute

Tether's ambitious plan to establish a bitcoin mining presence in Uruguay has hit a snag. The stablecoin issuer, which controls around $183 billion worth of stablecoins and holds investments valued at roughly $20 billion, invested approximately $120 million in two mining sites in rural Uruguay beginning in 2023.

The project aimed to serve as a launchpad for broader South American mining operations. However, the venture encountered significant challenges due to a contractual dispute with state-run power utility UTE over electricity supply.

Tether believed the contract set a minimum supply that could later be increased, while UTE treated it as a hard cap. As mining demand grew, the sites were left without sufficient electricity for days at a time, according to a former Tether contractor.

The dispute worsened after a new left-leaning government took office in March 2025 and appointed new directors at UTE who took a harder line on renegotiation. Microfin, Tether's local entity, stopped paying its electricity bills in May 2025 and informed UTE of its intention to terminate contracts the following month.

UTE subsequently cut power to the mining sites on July 25, 2025, and Tether notified Uruguay's labor authorities in November that it would cease operations. The collapse came as bitcoin mining profitability declined industry-wide following the April 2024 halving, which reduced the block subsidy by half.