Tether’s plan to build bitcoin mining operations in Uruguay has collapsed after a dispute over electricity supply. This project has expected to bring investment and jobs.
The cryptocurrency company announced the project in 2023. It planned to build two mining sites in Uruguay’s Florida department. A former Tether contractor estimates that the company spent about $120 million on the project.
Quick Facts
| Detail | Information |
|---|---|
| Company | Tether |
| Country | Uruguay |
| Project | Bitcoin mining operations |
| Announced | May 2023 |
| Planned Sites | Two mining sites in Florida, Uruguay |
| Estimated Investment | About $120 million |
| Main Problem | Dispute over electricity supply with UTE |
| Power Cut | UTE cut electricity to the mining sites on July 25, 2025 |
| Local Company | Microfin |
| Project Status | Mining operations abandoned |
| Key Challenge | High electricity costs and limited power supply |
| Future Focus | AI data centers and high performance computing may offer better opportunities |
Tether Chose Uruguay for Its Mining Plans
Uruguay was considered by Tether as a suitable place to mine bitcoin. The nation boasts a strong electrical system, strong internet access, and a large proportion of renewable energy.
Additionally, the business saw Uruguay as a potential starting point for more extensive mining activities across South America. Potential growth into markets like Brazil, Paraguay, and Argentina was part of its ambitions.
At the time, Tether declared that it will make investments in energy generation. However, it did not specify the amount of money it intended to spend.
The mining of bitcoin uses a lot of power. Strong computers conduct transactions and get bitcoin rewards all day long. The cost of electricity has a significant impact on mining profitability.
Electricity Dispute Hurt the Project
The mining operation initially performed well, according to former Tether contractors. The situation later changed because of a disagreement with Uruguay’s state power company, UTE.
The dispute focused on the amount of electricity Tether could receive.
Tether believed its agreement allowed the company to increase its power supply later. UTE viewed the contracted amount as the maximum supply it could provide.
The disagreement became serious by November 2024, according to an internal UTE briefing reviewed by Reuters.
Tether and its local company, Microfin, did not respond to requests for comment about the electricity agreement.
Power Supply Problems Led to Shutdown
Uruguay’s political change also affected the situation, according to people familiar with the project.
A new government took office in March 2025 and appointed new directors at UTE. According to a former contractor, the utility then took a tougher position on changing Tether’s electricity agreement.
Microfin stopped paying its electricity bills two months later. In June 2025, the company told UTE that it planned to end its contracts.
Both sides later tried to save the project. UTE approved a proposed memorandum and revised contract terms. However, Tether representatives did not attend the signing.
UTE eventually cut electricity to the mining sites on July 25, according to the utility’s internal document.
Microfin later told Uruguay’s labor authorities that it would stop operations and dismiss most of its workers. The company settled its outstanding electricity debts in December, UTE told Reuters.
Bitcoin Mining Faces Higher Costs
The collapse of Tether’s Uruguay project also highlights a wider problem in the bitcoin mining industry.
Mining has become more difficult and less profitable for many operators. The bitcoin reward fell after the April 2024 halving. Bitcoin’s price also dropped sharply from its 2025 peak.
At the same time, electricity costs have increased in many markets.
Mining companies are now looking for other ways to use their computing equipment. Some operators have purchased more efficient machines or moved to locations with cheaper electricity.
Others are turning their computing capacity toward artificial intelligence and high performance computing.
Tether Looks Toward AI and Other Investments
Tether has invested billions of dollars in energy production and bitcoin mining as part of its broader investment strategy.
The company has also expanded into several other industries. Its investments include data centers, technology companies, a brain implant business and a stake in Italian football club Juventus.
Those assets have generated large profits for the company. Tether has used some of those profits to build a wider investment portfolio.
What Uruguay’s Failure Shows
The failed project shows the risks involved in bitcoin mining. Mining companies can move quickly when electricity costs become too high or when local conditions change.
Uruguay has a strong renewable energy sector and reliable infrastructure. However, its electricity costs can still make large scale bitcoin mining difficult.
Industry experts say Uruguay may be better suited to data centers serving AI and high performance computing. These businesses can benefit from the country’s power grid and internet infrastructure without depending as heavily on extremely cheap electricity.
For Tether, the failed Uruguay project shows how quickly a major mining investment can change when energy supply, costs and business conditions no longer support the operation.
