Tether’s plan to build a bitcoin mining foothold in Uruguay has unraveled after a disagreement with the country’s state-run power utility over electricity supply, according to a Reuters investigation.
The stablecoin issuer invested roughly $120 million across two mining sites in rural Uruguay beginning in 2023, viewing the country as a launchpad for broader South American mining operations.
Energy dispute derails the project
The core problem was a contractual disagreement with state utility UTE over how much power Tether’s local entity, Microfin, was entitled to draw.
Tether believed the contract set a minimum supply that could later be increased, while UTE treated it as a hard cap.
As mining demand grew, the sites were left without sufficient electricity for days at a time, a former Tether contractor told Reuters.
The dispute worsened after a new left-leaning government took office in March 2025 and appointed new directors at UTE who took a harder line on renegotiation.
Microfin stopped paying its electricity bills in May 2025 and told UTE it would terminate its contracts the following month.
UTE cut power to the mining sites on July 25, 2025, and Tether told Uruguay’s labor authorities in November that it would cease operations.
Profitability pressures mount
The collapse came as bitcoin mining profitability has declined industry-wide following the April 2024 halving, which cut the block subsidy in half.
Many miners have responded by seeking cheaper energy, upgrading hardware, or pivoting computing resources toward AI.
Northumbria University assistant professor Pete Howson described bitcoin mining as “hypermobile” infrastructure:
“This plug-and-play infrastructure is very easy to do — literally pulling the plug and then move it to somewhere else.”
Uruguay not viable for mining
Crypto mining expert Nicolas Ribeiro said Uruguay’s relatively high energy costs make it a poor fit for mining, despite strong renewable generation and grid reliability:
“Uruguay isn’t viable for mining — that’s the reality.”
Tether, which controls around $183 billion worth of stablecoin and holds a portfolio of investments it values at roughly $20 billion, did not respond to Reuters’ requests for comment.
The company has since announced mining investments in Brazil as it continues expanding operations across Latin America.
