Tether Abandons Uruguay Mining Project Amid Electricity Dispute

Tether's ambitious bitcoin mining project in Uruguay has hit a snag due to a dispute over electricity supply with state utility UTE. The company had invested around $120 million in two mining sites, each costing roughly $60 million, as part of its plans to launch operations in South America.

The project was seen as a 'first step' for Tether's mining push across the continent, with Brazil and Argentina being targeted as potential next markets. However, the dispute over power supply with UTE has led to the sites being shut down, with Tether's local entity, Microfin, ceasing electricity payments in June 2025.

The disagreement centered around a clause in the contract that Tether believed represented a minimum level of supply, while UTE treated it as a maximum. The dispute escalated after a left-leaning government took office in March 2025 and appointed new UTE directors who took a harder line on renegotiating the contract.

Tether's mining economics have been weakened by a pre-programmed 'halving' of bitcoin rewards in April 2024 and a sharp drop in the cryptocurrency's price from its 2025 peak. The collapse of this project highlights the challenges faced by bitcoin miners, who rely on cheap energy to turn profits.