Cryptocurrency company Tether has abandoned its plans to establish a bitcoin mining operation in Uruguay following a dispute over electricity supply. The company, which issues the world’s most widely used stablecoin, had intended to use the South American nation as a testing ground for further expansion into Brazil, Paraguay, and Argentina. A Reuters review of internal documents and interviews indicates that the two planned mining sites in the department of Florida were closed after disagreements with the state utility, UTE, over energy allocations.
Tether first announced its entry into Uruguay in May 2023, citing the country's abundant renewable energy and political stability as key factors. Bitcoin mining is a process where computers solve puzzles to secure the network in exchange for rewards, a task that requires significant amounts of electricity. The company previously stated it has invested more than $2 billion globally in energy production and mining operations, using profits generated from its stablecoin assets, which include $183 billion in circulation.
The project began to fail when Tether and UTE disagreed on whether the contracted power levels were a minimum guarantee or a maximum limit. By November 2024, Tether faced power shortages as demand at its plants exceeded the utility's supply. The situation was further complicated in March 2025 when a new government took office in Uruguay and appointed new directors to UTE, who took a firmer stance on contract negotiations. Microfin, Tether’s local legal entity, stopped paying its bills in May 2025, leading UTE to cut power to the sites on July 25, 2025.
For residents and workers in Uruguay, the concrete impact was the termination of the project and the layoff of staff. Tether notified labor authorities on November 25, 2025, that it would cease operations and release most of its employees. While Microfin settled its outstanding debts with UTE in December 2025, the permanent infrastructure, which included computing hardware and buildings decorated with industry jargon like "Memepool Avenue," remains unused. Analysts suggest that Uruguay's relatively high electricity costs, despite its renewable grid, make it less viable for mining compared to other fintech sectors like artificial intelligence.
The knock-on effects include a shift in Tether’s focus toward other markets and technologies. Since the Uruguayan project stalled, Tether has announced investments in Brazil and has begun exploring high-performance computing and AI as alternatives to bitcoin mining, which saw a reduction in profit margins following the April 2024 "halving" event. The incident sets a precedent for how state utilities in the region may handle high-energy-demand tech firms during political transitions. What happens next involves Tether’s continued pivot toward its $20 billion portfolio of diversified investments, which includes interests in brain implants and European football.