Tether’s planned Bitcoin mining expansion in Uruguay has collapsed after an electricity supply dispute with state utility UTE left two facilities without enough power, ending a project estimated to have cost around $120 million.
Summary
- Tether invested an estimated $120 million across two Bitcoin mining sites in Uruguay’s Florida department.
- A dispute with state utility UTE over electricity allocations left the facilities without enough power to operate consistently.
- UTE disconnected the mining sites in July 2025 after contract negotiations failed and electricity bills went unpaid.
- Tether has continued investing in Bitcoin mining elsewhere, including renewable energy projects in Brazil and mining infrastructure.
Reuters has reported that Tether abandoned two mining sites in Uruguay’s Florida department after disagreements over electricity allocations disrupted operations and eventually led its local entity, Microfin, to terminate contracts with UTE.
The project had been presented in 2023 as Tether’s first major Bitcoin mining venture in South America, with Uruguay serving as a testing ground before potential expansion into Brazil, Paraguay and Argentina. A former contractor told Reuters that Tether spent roughly $60 million on each of the two sites.
Tether did not disclose an investment figure when it announced the Uruguay operation in May 2023, describing the country as the “perfect platform” because of its renewable energy supply and reliable electricity grid.
By late 2025, however, crypto.news reported that the company had informed Uruguay’s labor authorities that it would cease local operations and had laid off 30 of its 38 employees. More than $100 million had already been spent at the time, while another $50 million had been earmarked for infrastructure that was expected to pass to UTE and Uruguay’s National Interconnected System.
Tether Bitcoin mining plans ran into an electricity supply dispute
At the core of the failed project was a disagreement over how much power Microfin could draw from UTE, according to two former Tether contractors and a source at the state utility cited by Reuters.
Tether understood a provision in its electricity contract as setting a minimum power allocation that could later be increased, one former contractor said. UTE interpreted the same amount as the maximum level available under the agreement.
As demand at the mining facilities increased, the difference became critical. One former contractor told Reuters that the sites sometimes lacked enough electricity to operate for days at a time.
UTE sources also said the dispute concerned the electricity allocation available to Microfin, which operated locally on Tether’s behalf.
An internal UTE briefing reviewed by Reuters showed that the disagreement was already underway by November 2024. Tether and Microfin did not respond to the news agency’s requests for comment about the contract.
Political changes later complicated negotiations, according to people familiar with the discussions. Uruguay’s new left-leaning government took office in March 2025 and appointed new directors at UTE, after which the utility adopted a firmer position on renegotiating the electricity agreement, one former contractor told Reuters.
Two months later, Microfin stopped paying electricity bills. The company informed UTE in June 2025 that it intended to terminate its contracts, according to the utility’s internal briefing.
The two sides still attempted to preserve the project. UTE’s board approved a memorandum of understanding and revised contract documents, but Tether representatives did not attend the scheduled signing, minutes included in the briefing showed.
With the agreement unsigned and bills outstanding, UTE disconnected electricity to the facilities on July 25. Earlier reporting put the unpaid balance connected to the two sites at roughly $5 million.
Microfin eventually settled the outstanding debt in December, UTE told Reuters.
Uruguay was intended as the first step into South America
Tether had initially viewed Uruguay as an entry point for a much larger regional mining operation, according to a former contractor who worked with the company.
The country offered political stability, established infrastructure and an electricity system powered heavily by renewable sources, while the Florida facilities allowed the company to test its mining model before committing more capital elsewhere.
Tether CEO Paolo Ardoino and chairman Giancarlo Devasini have also been frequent visitors to the coastal resort of Punta del Este, industry sources told Reuters. The city has attracted wealthy foreign residents and technology investors, including billionaire Peter Thiel, who is building a reported $10 million residential compound nearby.
Early operations at Tether’s facilities generated revenue and were initially well managed, according to two former contractors. A February 2024 company video showed rows of mining buildings surrounded by farmland and wind turbines, with internal roads carrying crypto-themed names including “Memepool Avenue” and “Halving Street.”
The Uruguay exit has not ended Tether’s mining activity elsewhere in the region. In July 2025, the company signed a mining agreement with Latin American agricultural producer Adecoagro to use renewable electricity for Bitcoin mining in Brazil.
Adecoagro had more than 230 megawatts of renewable generation capacity at the time and planned to use mining to monetize surplus electricity. Its CEO Mariano Bosch said the arrangement could help secure pricing for energy normally sold on the spot market while giving the company exposure to Bitcoin.
Ardoino said at the time that the Brazil project formed part of Tether’s commitment to renewable-powered mining.
Tether keeps investing in Bitcoin mining infrastructure
Mining remains part of Tether’s investment strategy despite the Uruguay withdrawal.
Ardoino said at an industry conference last year that the company had invested more than $2 billion in energy production and Bitcoin mining, according to Reuters.
Tether has also put capital into mining-related companies. In June, it sold 627,000 shares in Bitdeer for about $12.7 million but retained a 19.7% stake in the Bitcoin mining and AI infrastructure firm. The shares were sold at roughly $20 each.
Its involvement now extends to the software used to run mining operations. Tether released MiningOS as open-source software in February 2026, giving operators a system designed to manage installations ranging from small home setups to large industrial sites.
The company followed that release with an open-source Mining Development Kit in April, providing developers with tools for controlling and automating mining hardware through a common software framework.
Those investments are funded partly through profits generated by Tether’s stablecoin business. The company controls about $183 billion worth of stablecoins, Reuters reported, while assets backing its tokens have made it one of the world’s largest holders of U.S. government debt.
Tether reported $1.04 billion in net profit for the first quarter of 2026, with total assets of $191.77 billion and liabilities of $183.54 billion, according to its quarterly attestation. Its exposure to U.S. Treasuries stood at about $141 billion.
Profits from the stablecoin operation have also been deployed into data centers, video platform Rumble, brain-computer interface businesses and Italy’s Juventus football club, Reuters reported.
Bitcoin mining economics have pushed operators toward AI
The Uruguay shutdown has occurred during a difficult period for Bitcoin miners, whose revenue was hit by the April 2024 halving and later pressure on Bitcoin prices.
The halving cut the block subsidy paid to miners in half, forcing operators to rely on more efficient machines, cheaper electricity, or alternative uses for their power and data center infrastructure.
By mid-2026, hashprice, a measure of miner revenue generated per unit of computing power, had fallen into the high-$20 range per petahash per day, while older machines faced estimated breakeven levels of about $35, according to research on miner finances published in July. Public mining companies sold more than 32,000 BTC during the first quarter of 2026 as financial pressure increased.
Some operators have increasingly allocated power and facilities to artificial intelligence and high-performance computing. A June analysis found that public Bitcoin miners had secured more than $70 billion in AI and HPC contracts, while a tracked basket of mining shares had risen more than 50% in 2026 despite Bitcoin falling about 17% over the measured period.
Tanay Ved, senior research analyst at Talos, told Reuters that miners have responded to tighter economics by buying more efficient hardware, finding cheaper sources of electricity or redirecting computing infrastructure toward AI and high-performance workloads.
Mining specialist Nicolas Ribeiro said Uruguay’s reliable grid and internet connectivity could make the country better suited to AI data centers, while relatively expensive electricity weakens the economics of Bitcoin mining.
“Uruguay isn’t viable for mining — that’s the reality,” Ribeiro said.