TLDR
- Tether abandons two Uruguay Bitcoin mining sites after a major power dispute.
- The failed Uruguay mining project reportedly cost Tether about $120 million.
- UTE cut electricity after contract talks failed and unpaid bills still remained.
- Tether had planned to use Uruguay as a launchpad for South American mining.
- Rising power costs and weaker mining economics are reshaping Bitcoin operations.
Tether has abandoned two Bitcoin mining facilities in Uruguay after a power dispute disrupted operations and ended the $120 million project. The company had planned to use Uruguay as a regional testing ground for wider South American expansion. However, disagreements over electricity allocations eventually left the mining sites without enough power to operate reliably.
Tether Power Dispute Ends Uruguay Bitcoin Mining Project
Tether launched its Uruguay mining operation in 2023, citing renewable energy, grid reliability, political stability, and favorable business conditions. The company developed two facilities in Florida department, with each site reportedly costing about $60 million. Together, the sites represented one of the company’s largest early mining investments in South America.
Operations initially generated revenue, but electricity supply problems later created serious difficulties for both mining facilities. Tether understood its UTE contract as allowing power allocations to increase when operational demand required more electricity. However, state utility UTE treated the contracted electricity amount as the maximum supply available to Microfin.
The dispute had developed by November 2024, according to an internal UTE briefing reviewed by Reuters. Rising mining demand then left the facilities without enough electricity for several days during some operating periods. Consequently, the disagreement weakened production capacity and complicated efforts to keep the two mining sites commercially sustainable.
Tether Ends Contracts After Negotiations Fail
Political changes later added pressure to negotiations between Microfin and Uruguay’s state-owned electricity provider. A new government took office in March 2025 and appointed fresh directors to UTE. The utility then adopted a firmer position during discussions about possible changes to the electricity supply agreement.
Microfin stopped paying electricity bills two months later and informed UTE about plans to terminate existing contracts. Both sides still attempted to preserve the project through a revised agreement and memorandum of understanding. However, Tether representatives did not attend the planned signing after UTE approved the revised contractual documents.
UTE disconnected electricity from the mining facilities on July 25 after unpaid bills remained and the memorandum stayed unsigned. Microfin later informed labor authorities about plans to end operations and reduce most local staffing. The company eventually settled outstanding debts with UTE in December, but mining operations did not resume.
Bitcoin Mining Economics Shift Toward Cheaper Power
Tether originally viewed Uruguay as an entry point for broader Bitcoin mining expansion across South America. The company considered the country suitable because renewable energy supports most electricity generation and infrastructure remains dependable. It also planned to test its mining model before considering larger operations in Brazil, Paraguay and Argentina.
Relatively high electricity costs have weakened Uruguay’s position as a competitive Bitcoin mining location. Mining profitability has also faced pressure since the Bitcoin halving reduced block rewards during April 2024. Lower cryptocurrency prices and rising power expenses have since placed additional pressure on mining operators worldwide.
Tether continues investing in mining, energy infrastructure, software, and related companies despite ending the Uruguay operation. The company has also expanded renewable-powered mining activity in Brazil and released open-source tools for mining management. Meanwhile, some mining operators increasingly redirect infrastructure toward artificial intelligence and high-performance computing as Bitcoin margins tighten.
