Hassan Maishera
TL;DR
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Tether reportedly abandoned a Bitcoin mining project in Uruguay after investing an estimated $120 million.
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A contractual dispute with state-owned utility UTE centered on whether agreed electricity allocations represented a minimum supply or a strict maximum.
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UTE disconnected the mining facilities on July 25, 2025, after revised contracts went unsigned and electricity bills remained unpaid.
Tether’s Uruguay Bitcoin Mining Project Collapses
Tether has reportedly abandoned a Bitcoin mining project in Uruguay after a dispute with the country’s state-owned electricity provider derailed operations and undermined its regional expansion plans.
According to a Reuters investigation, the stablecoin issuer spent an estimated $120 million developing two mining facilities in Uruguay’s Florida department.
The company had initially viewed the project as a starting point for a larger push into South America.
However, disagreements over electricity supply, unpaid utility bills, and changes in government leadership eventually led to the closure of both mining sites.
Tether did not publicly disclose the size of its investment and did not respond to requests for comment from Reuters or The Block.
The central disagreement involved conflicting interpretations of Tether’s electricity contract with UTE, Uruguay’s state-owned power utility.
Tether reportedly believed the agreed power allocation represented a minimum supply that could be increased as its mining operations expanded.
UTE, however, considered the figure a fixed maximum that could not be exceeded.
Two former contractors told Reuters that the facilities initially operated successfully and generated revenue.
As electricity demand increased, however, the mining sites sometimes experienced power shortages that lasted several days.
The lack of reliable access to additional electricity created operational difficulties and intensified disagreements between the two parties.
Revised Agreement Failed as Political Leadership Changed
Tether and UTE attempted to resolve the dispute by negotiating a revised electricity contract.
However, meeting notes obtained by Reuters indicated that Tether representatives did not attend the planned signing.
According to a former contractor and another source familiar with the situation, tensions increased after Yamandú Orsi took office in March 2025 and appointed new leadership at UTE.
The sources said the utility’s new directors adopted a tougher negotiating stance.
Microfin, Tether’s Uruguayan legal entity, stopped paying its electricity bills two months after the change in government.
In June 2025, the company informed UTE that it intended to terminate its contracts.
With the revised agreement unsigned and outstanding bills unpaid, UTE disconnected both mining facilities on July 25, 2025.
Tether later notified Uruguay’s labor authorities on November 25 that it would cease operations and dismiss most of its staff.
Tether first announced its Uruguay mining initiative in May 2023, describing the country as an attractive location because of its renewable energy production and established electricity grid.
Uruguay’s political stability also made it appealing to foreign investors. A former contractor told Reuters that Tether considered the project a testing ground before expanding into other South American markets, including Brazil, Paraguay, and Argentina.
At the time, Tether said it expected to expand its mining operations into additional countries.
The project’s collapse therefore represented a setback not only for its operations in Uruguay but also for its original regional expansion strategy.
The shutdown came shortly after Tether publicly outlined major ambitions for its Bitcoin mining business.
In June 2025, CEO Paolo Ardoino told The Block’s Big Brain podcast that the company aimed to become the world’s largest Bitcoin miner by the end of that year.
At the time, Tether said it had invested more than $2 billion in energy and mining infrastructure across 15 sites in Uruguay, Paraguay, and El Salvador.
UTE disconnected the two Uruguayan facilities the following month.
Although the Uruguay project was discontinued, Tether has continued expanding its energy and mining investments elsewhere in the region.
Tether Continues Investing in Mining and Renewable Energy
Tether acquired a 70% stake in renewable energy producer Adecoagro and later signed an agreement to use the company’s surplus electricity for Bitcoin mining.
The stablecoin issuer has also released an open-source operating system for mining operations, expanding its involvement in mining software.
In addition, Tether disclosed an 8.2% stake in mining finance company Antalpha and began developing modular mining systems with Canaan and ACME Swisstech.
Together, these initiatives indicate that Tether remains committed to building a broader presence across the Bitcoin mining and energy supply chain despite its withdrawal from Uruguay.
Tether Maintains Expansive Investment Portfolio
Despite the failed project, Tether remains one of the largest and most influential companies in the digital asset industry.
Its USDT stablecoin has approximately $183 billion in circulation, maintaining its leading position in the global stablecoin market.
Reuters reported that the El Salvador-based company also values its investment portfolio at approximately $20 billion.
The portfolio includes more than 100 investments, many of which have not been publicly disclosed, reflecting Tether’s ambitions across cryptocurrency infrastructure, energy, and other sectors.
