Tether Halts Bitcoin Mining Operations in Uruguay Over Energy Dispute

Tether's ambitious plan to build a bitcoin mining business in Uruguay has been halted due to a dispute over energy supplies. The company, which initially described Uruguay as a 'perfect platform' for its operations, invested around $60 million in each of two mining facilities in the department of Florida.

The project encountered fundamental problems over electricity capacity, with Tether and state-owned power company UTE having different interpretations of the electricity supply contract. According to internal UTE documents, the dispute had been ongoing since November 2024, with the situation becoming more complicated after Uruguay's government changed in March 2025.

The new left-leaning government appointed a new UTE board and took a firmer stance towards Tether's request to renegotiate the energy supply contract. Microfin, Tether's local legal entity in Uruguay, stopped paying its electricity bills two months after the new government took office, and subsequently notified UTE that it would terminate the contract.

The failure of the project is significant for Uruguay, which has seen foreign direct investment into the country stand at around $2 billion a year. The project was initially positioned as the first stage of Tether's expansion into South America, before the company moved further into markets such as Brazil, Paraguay and Argentina.