The closure of Tether's mining operation in Uruguay stemmed from a dispute with the state energy company UTE regarding the electricity supply, according to Reuters. Previously, the issuer of the USDT stablecoin cited uncompetitive tariffs as the reason for its decision.
Dispute Arises Over Energy Supply Terms
Tether initiated Bitcoin mining in Uruguay in 2023, investing a total of $120 million in two sites located in the Florida department. According to former contractors, the facilities initially operated smoothly and generated revenue.
However, issues arose as energy consumption increased. The two parties had different interpretations of their agreement: Tether viewed the agreed electricity volume as a minimum that they could increase as the project progressed, while UTE considered it a maximum limit.
This misunderstanding resulted in frequent power outages lasting several days at the sites. Although Tether and UTE planned to negotiate a new agreement, representatives from the USDT issuer did not attend the meeting, as indicated by the meeting notes reviewed by Reuters.
Sources noted that the dispute intensified after a leadership change at the energy company. In March 2025, Yamandú Orsi became the president of Uruguay, following which new directors were appointed at UTE. However, journalists found no evidence that the project's failure was directly linked to political changes.
Sites Shut Down in July 2025
Approximately two months after the government transition, Tether's local entity, Microfin, stopped paying electricity bills. In June 2025, the company informed UTE of its intention to terminate the contracts.
On July 25, the energy company disconnected both sites from the grid. By that time, a new agreement had not been signed, and the bills remained unpaid.
On November 25, Tether notified the labor authorities in Uruguay about ceasing operations and laying off most employees. Two months prior, local media reported that the issuer owed around $4.8 million for electricity and related services.
Uruguay Was to Be the First Step in Expansion
One former contractor revealed to Reuters that Tether viewed Uruguay as a testing ground before expanding Bitcoin mining into Brazil, Paraguay, and Argentina.
The halted operations did not exhaust the company's ambitions in Uruguay; Tether's management intended to invest up to $500 million in the country, which would include three data centers with a combined capacity of 165 MW and 300 MW of renewable generation facilities.
Moreover, Bitcoin mining continues to be a priority for Tether. In June 2025, CEO Paolo Ardoino predicted the company's leading position in this sector. At that time, the issuer valued its investments in energy and mining infrastructure at over $2 billion and reported having 15 sites across several South American countries.
It is worth noting that in early 2026, Tether launched an open-source operating system for Bitcoin mining.