Tether's Uruguay Mining Venture Shut Down Amid Electricity Contract Dispute

Tether's Bitcoin mining venture in Uruguay has come to an end due to a dispute over electricity contracts. In 2023, Tether chose Uruguay as its first major South American mining site, investing around $120 million in two sites in the rural Florida department.

The company had high hopes for expansion into Brazil, Paraguay, and Argentina from this location, but things took a turn for the worse. The problem lay in the contract with Uruguay's state-owned utility, UTE. Tether interpreted the agreed power allocation as a minimum that could be increased as mining operations expanded, while UTE saw it as a maximum.

As electricity demand grew, the facilities were sometimes left without enough power for days at a time. Attempts to renegotiate the contract failed, and by 2025, Tether's local entity, Microfin, stopped paying its electricity bills and notified UTE of its intention to terminate the contracts. UTE eventually cut power to the sites on July 25 2025.

Tether later told labour authorities it would cease operations and lay off most of its local staff. This case highlights a crucial distinction in discussions about sustainable Bitcoin mining: renewable energy is not, by itself, a viable business model.