Tether halted an estimated $120 million Bitcoin mining project in Uruguay after a dispute over electricity supply and unpaid bills led the state-owned utility UTE to disconnect two facilities, Reuters reported. The shutdown ended a venture that Tether had presented as a potential launchpad for a larger South American mining network and exposed the difficulty of running power-intensive operations under contracts with state utilities.
UTE cut electricity to the mining sites in Uruguay’s Florida department on July 25, 2025, after Tether’s local entity, Microfin, did not sign a revised supply agreement and had stopped paying its power bills, according to Reuters. Tether later notified Uruguay’s labor authorities on Nov. 25 that it would end operations and lay off most of the remaining staff.
The conflict centered on a basic but consequential issue for a mining operation: how much power the sites were entitled to use. Tether’s representatives treated the electricity figure in the original contract as a starting point that could be increased as demand grew, Reuters reported. UTE regarded the stated amount as a fixed maximum.
That difference became more costly as the facilities required more electricity. Two former contractors told Reuters that the sites initially ran without major disruptions, but later experienced periods lasting days when they lacked sufficient supply to operate at full capacity.
Unfinished contract revision preceded disconnection
Both sides sought to revise the agreement as the dispute developed. Reuters reported that company representatives did not attend a scheduled signing meeting, citing meeting notes it reviewed. Without the amended contract, the disagreement over power limits remained unresolved.
The dispute also unfolded during a change in Uruguay’s government. Yamandú Orsi took office as president in March 2025 and subsequently appointed new UTE directors, Reuters reported, citing a former contractor and another source familiar with the matter. Microfin stopped paying UTE bills about two months after the change in government, according to the report.
In June, Microfin told UTE it intended to terminate its contracts. UTE disconnected the two sites the following month, leaving the project without the electricity needed to continue mining.
The reported $120 million spending figure came from a source familiar with the arrangement and has not been publicly disclosed by Tether. Even so, the closure represents a sharp reversal from the company’s early ambitions in Uruguay, where it announced a mining and renewable-energy initiative in May 2023.
A former contractor told Reuters that Uruguay was intended to serve as a first stage before possible expansion into Brazil, Paraguay and Argentina. The plan relied on pairing Bitcoin mining equipment with electricity generation, a model that can be viable where operators can secure low-cost power or absorb surplus output that would otherwise go unused.
Tether’s regional mining plans continue elsewhere
The Uruguay setback does not appear to have ended Tether’s interest in mining infrastructure across Latin America. In June 2025, Tether Chief Executive Officer Paolo Ardoino said the company aimed to become the world’s largest Bitcoin miner by the end of that year. The company said at the time that it had committed more than $2 billion to energy and mining infrastructure across 15 sites in Uruguay, Paraguay and El Salvador.
Tether has also moved into energy generation. It acquired a 70% stake in renewable-energy producer Adecoagro and later entered an agreement to use surplus electricity for Bitcoin mining, according to Reuters. Owning or controlling more of the power supply could reduce the type of contractual uncertainty that emerged in Uruguay, although it does not eliminate exposure to local regulation, transmission constraints or changes in electricity pricing.
Beyond energy assets, Tether has expanded its mining strategy through technology and financing. The company released an open-source operating system for mining operations, disclosed an 8.2% stake in mining-finance firm Antalpha, and has worked with Canaan and ACME Swisstech on modular mining systems, Reuters reported.
Those efforts place Tether among a growing group of companies seeking to turn mining into a more integrated energy-and-computing business rather than a standalone bet on Bitcoin production. Yet Uruguay illustrates that hardware, capital and technical capability do not guarantee access to the electricity a mining site needs.
Uruguay’s power economics limit mining appeal
Uruguay has a strong renewable-energy profile and infrastructure that can appeal to data-heavy industries. But its electricity prices are comparatively high for Bitcoin mining, crypto mining specialist Nicolas Ribeiro told Reuters. Mining margins are particularly sensitive to power costs because machines run continuously and their revenue varies with Bitcoin’s price, network difficulty and transaction-fee levels.
Ribeiro said Uruguay’s grid and internet connectivity could be better suited to artificial intelligence data centers than to Bitcoin mining. AI training and inference workloads can command higher returns per unit of electricity, creating more competition for available power and making mining less attractive where tariffs are not exceptionally low.
The financial pressure is broader than one project. Mining operators have faced fluctuating revenue after the April 2024 Bitcoin halving reduced the block subsidy, while rising hardware efficiency and competition have made older machines harder to operate profitably. Facilities can relocate, scale down, or shut machines off when power contracts no longer support their economics.
Tether’s mining retreat also contrasts with the scale of its core stablecoin business. USDT had about $183 billion in circulation, Reuters reported, while the company’s investment portfolio was valued at about $20 billion and included more than 100 investments, many of which had not been publicly disclosed. Tether is based in El Salvador and employs a few hundred people, according to Reuters.
For Uruguay, the episode leaves two disconnected sites and a failed negotiation over a highly specialized industrial power load. For Tether, it narrows a regional mining footprint that was meant to support a far more aggressive expansion timetable, while pushing its energy strategy toward jurisdictions and projects where electricity access can be secured on clearer commercial terms.
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