Tether has ended its Bitcoin mining operations in Uruguay after a dispute with state-owned utility UTE over electricity supply, abandoning a project that reportedly cost about $120 million.
The company launched the Uruguay mining initiative in 2023, citing renewable energy, grid reliability, political stability and favorable business conditions. Tether developed two facilities in the Florida department, with each site estimated to cost roughly $60 million. The operation was intended as a testing ground for broader South American expansion into Brazil, Paraguay and Argentina.
According to an internal UTE briefing reviewed by Reuters, the dispute had already developed by November 2024. Tether understood its contract as allowing power allocations to increase when operational demand required more electricity, while UTE treated the contracted amount as the maximum supply available to Tether's local entity, Microfin. This disagreement left the facilities without enough electricity for several days during some periods and weakened production capacity.
Political changes added further pressure after a new government took office in March 2025 and appointed new directors to UTE. The utility then adopted a firmer negotiating position. Microfin stopped paying electricity bills two months later and informed UTE about plans to terminate existing contracts. Although both sides attempted to preserve the project through a revised agreement and memorandum of understanding, Tether representatives did not attend the planned signing after UTE approved the revised 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 did not resume.
Rising electricity costs have also weakened Uruguay's position as a competitive Bitcoin mining location. Mining profitability has faced additional pressure since the Bitcoin halving reduced block rewards in April 2024, while lower cryptocurrency prices and higher power expenses have created challenges for operators worldwide. Tether continues to invest in mining, energy infrastructure, software and related companies, and has expanded renewable-powered mining activity in Brazil. Some mining operators are increasingly redirecting infrastructure toward artificial intelligence and high-performance computing as Bitcoin margins tighten.
