Key facts
- Tether's bitcoin mining operations in Uruguay have been abandoned due to a dispute over energy supply.
- The company invested approximately $120 million in two mining sites in the department of Florida.
- The core of the dispute involved differing interpretations of the electricity supply contract with state utility UTE.
- A change in government and new UTE directors reportedly hardened the utility's stance on contract renegotiation.
- Tether's local entity, Microfin, terminated its contracts after disputes over power allocation and unpaid bills.
- The collapse of the Uruguay deal coincides with decreased profitability in bitcoin mining.
Tether, a major stablecoin issuer, abandoned plans for two bitcoin mining sites in Uruguay after a dispute with state utility UTE over energy supply. The company had invested an estimated $120 million in the project, which was intended as a stepping stone for expansion into larger South American markets like Brazil, Paraguay, and Argentina.
The core of the disagreement centered on the interpretation of the electricity supply contract. Tether believed a clause allowed for increased power allocation, while UTE viewed the contracted amount as a maximum limit. This issue was reportedly compounded by a political shift in Uruguay, with a new left-leaning government appointing new directors to UTE who took a firmer stance on contract renegotiations.
According to UTE's internal documents, Tether's local entity, Microfin, stopped paying its electricity bills and terminated its contracts in June 2025. This led UTE to cut power to the mining sites in July 2025. In November 2025, Tether announced it would cease operations and lay off most staff, with Microfin settling its outstanding debts in December.
The collapse of the Uruguay venture occurs as the economics of bitcoin mining face challenges. Analysts note that the halving event in April 2024, coupled with a drop in bitcoin's price, has reduced profitability. Miners are exploring strategies such as acquiring more efficient hardware, seeking cheaper energy, or repurposing computing power for AI and high-performance computing.