Tether Pulls Back From Uruguay, Exposing Bitcoin Mining’s Power Risks

Tether dropped its Bitcoin mining plans in Uruguay after a dispute over its power agreement highlighted the dangers of depending on uncertain electricity supplies.
Tether has scrapped a Bitcoin mining expansion in Uruguay that a former contractor valued at around $120 million, following a disagreement with state-run utility Administración Nacional de Usinas y Trasmisiones Eléctricas (UTE).
According to a Reuters investigation reviewed by Kontan, the dispute focused on the amount of electricity Tether was actually entitled to receive under its contract.
The episode goes beyond a delayed mining project, showing how ambiguous language in a power agreement and a government transition can derail years of industrial investment, even for a company with about $183 billion in stablecoin issuance.

In 2023, Tether announced plans to establish two Bitcoin mining facilities in Uruguay’s Florida Department, citing the nation’s renewable energy resources, dependable grid, political stability and favorable tax environment.
Microfin, Tether’s local entity, ran both sites and initially generated revenue without major problems. The dispute emerged over how the electricity allocation in the contract should be interpreted.
Tether and a former contractor viewed the agreed power figure as a minimum amount that could increase as the mining facilities expanded.
UTE, however, regarded the same figure as a maximum limit that could not be surpassed without negotiating a new agreement, according to a former Tether contractor and a UTE source.
Reuters-reviewed internal UTE documents from 2025 indicate that the disagreement had existed since at least November 2024. As electricity demand increased, the facilities reportedly experienced periods lasting several days without adequate power.

The conflict intensified after Uruguay’s left-leaning government took office in March 2025 and appointed new UTE officials who adopted a tougher position on Tether’s requests to renegotiate the agreement.
In May 2025, Microfin stopped making electricity payments, and the following month informed UTE that it planned to end the contract.
UTE’s board later approved a memorandum of understanding and a draft replacement agreement, but Tether representatives failed to attend the signing. With the memorandum still unsigned and electricity bills outstanding, UTE disconnected the mining facilities on July 25, 2025.
By November 2025, Tether had told Uruguay’s labor authorities that it would shut down operations and dismiss most of its workforce. Microfin cleared its outstanding UTE debt in December 2025.

Tether CEO Paolo Ardoino has said the company has committed more than $2 billion to energy generation and Bitcoin mining, with Uruguay originally intended as an entry point for a broader expansion across South America, including Brazil, Paraguay and Argentina.
Talos senior analyst Tanay Ved said miners are increasingly turning to more efficient equipment, lower-cost energy and alternative businesses such as AI and high-performance computing as they seek to protect margins after the April 2024 Bitcoin halving reduced mining rewards.
Crypto mining specialist Nicolas Ribeiro said Uruguay’s dependable electricity grid and strong connectivity could make the country more attractive for AI data centers than Bitcoin mining, where profitability is heavily dependent on securing inexpensive power.