Tether's Uruguay Mining Project Shut Down Over Electricity Dispute

Tether's ambitious Bitcoin mining project in Uruguay has hit a roadblock due to a dispute over electricity costs. The company had invested an estimated $120 million in two facilities, but a disagreement with state-owned utility UTE over power allocation led to the shutdown of operations.

According to documents and interviews reviewed by Reuters, Tether and UTE interpreted their electricity agreement differently, with the latter regarding it as a maximum allocation that could not be expanded. This distinction became crucial as the mines scaled up, and Bitcoin mining facilities require a large and predictable electricity supply to operate continuously.

The dispute did not immediately end the project, but negotiations between Tether and UTE ultimately failed, leading to the shutdown of operations in July 2025. Microfin, the local entity of Tether, had stopped paying its electricity bills by May 2025, and despite a revised agreement being approved, it was never completed.

The episode highlights the importance of contractual certainty over electricity prices and power consumption for large-scale mining operations. While Uruguay offered renewable energy generation, the country's relatively high power costs made it less competitive for Bitcoin mining, according to Nicolas Ribeiro, a crypto mining specialist. Tether has since shifted its investment elsewhere in South America.