Tether's Uruguay Bitcoin Mining Venture Crashes Amid Power Supply Dispute

Tether's Bitcoin mining venture in Uruguay has collapsed due to a prolonged dispute over power supply allocations. The project, which involved an estimated $120 million in spending, was seen as a strategic move by the stablecoin issuer to diversify its investments and promote local economic growth.

In May 2023, Tether announced plans to establish Bitcoin mining facilities in Uruguay, citing the country's substantial renewable energy resources and stable electrical grid. Two mining sites were developed in the Florida department, with each facility requiring an outlay of approximately $60 million, according to a former contractor involved in the work.

However, tensions emerged over the interpretation of the electricity supply agreement with UTE, Uruguay's state utility. Tether's local subsidiary, Microfin, understood a key contractual provision as establishing a baseline power level that could be expanded as mining demand grew. In contrast, UTE regarded the specified quantity as a firm upper limit that could not be surpassed.

The dispute intensified after a change in national administration in March 2025, when newly appointed utility directors adopted a firmer negotiating stance. Efforts to renegotiate the terms continued into the following year, but ultimately proved unsuccessful. Microfin eventually halted electricity payments and formally notified UTE of its intention to end the existing contracts.