Tether, the largest issuer of the USDT stablecoin, has reportedly ended a major Bitcoin mining project in Uruguay following a prolonged dispute with the state-owned energy company UTE. According to a Reuters investigation, the company invested around $120 million in the construction and development of two mining facilities in Florida Department.
The project was initially viewed as an important part of Tether’s broader strategy to expand its Bitcoin mining business across South America. Uruguay attracted the company with its high share of renewable energy, developed power infrastructure, and relatively stable economic environment. The successful launch of the facilities was expected to serve as a foundation for further expansion into other countries in the region.
In practice, however, electricity supply became the project’s main challenge. Tether and UTE disagreed over how much power the company was actually entitled to use. The dispute eventually affected not only the commercial terms of their relationship, but also Tether’s ability to scale the mining facilities.
The Power Dispute Gradually Brought the Project to a Halt
The main disagreement centered on different interpretations of the electricity supply agreement with UTE. According to sources, Tether viewed the agreed power allocation as a guaranteed minimum that could later be increased as its mining operations expanded.
The state-owned utility took a different position. UTE reportedly considered the contracted capacity to be a strict maximum that could not be exceeded without additional agreements.
Former contractors said the mining facilities initially operated successfully and generated revenue. However, as operations expanded, electricity demand increased as well. At certain points, the sites reportedly faced power shortages, with disruptions sometimes lasting several days.
For industrial-scale Bitcoin mining, such problems are especially serious. The economics of the business depend heavily on keeping equipment running continuously. When a data center does not have sufficient power, computing hardware sits idle while infrastructure and operating costs continue to accumulate.
As a result, the lack of a clear mechanism for increasing available capacity gradually turned what began as a contractual disagreement into a major operational problem.
Negotiations Failed to Resolve the Conflict
Tether and UTE attempted to reach a compromise by negotiating revised electricity supply terms. A new contract was expected to clarify the conditions for future operations and resolve the existing disagreements.
However, the agreement was never signed. According to materials cited by Reuters, Tether representatives did not attend the scheduled signing of the revised contract.
The situation became more complicated after political changes in Uruguay. In March 2025, Yamandú Orsi took office as president, after which UTE’s leadership also changed. Sources claimed that the utility’s new management adopted a tougher position in negotiations with Tether.
Tether’s Uruguayan legal entity, Microfin, later stopped paying electricity bills. In June 2025, the company informed UTE of its intention to terminate the existing contracts.
Because the two sides failed to agree on new terms and the outstanding electricity bills remained unpaid, UTE disconnected both mining facilities from the grid on July 25, 2025.
Tether later notified local labor authorities that it was ending operations and dismissing most of the employees connected to the project. As a result, an initiative that was supposed to become a key part of the company’s regional mining strategy was effectively shut down.
Uruguay Was Supposed to Become a Launchpad for Tether’s Expansion
Tether first announced plans to develop Bitcoin mining operations in Uruguay in May 2023. At the time, the company highlighted the advantages of the country’s energy systеm, where a significant share of electricity is generated from renewable sources.
The project was intended to serve as a testing ground. Tether could use it to evaluate the operation of large mining centers, relationships with local power suppliers, and the economics of Bitcoin mining in the region before expanding the model elsewhere.
Potential future markets reportedly included Brazil, Paraguay, and Argentina. South America as a whole was attractive to Tether because of its energy resources, growing crypto infrastructure, and the possibility of using surplus electricity for mining operations.
The shutdown of the Uruguayan facilities therefore represented more than a local setback. It also highlighted potential risks in the company’s broader expansion strategy. Even access to relatively inexpensive and renewable electricity does not guarantee a sustainable mining operation without clear and long-term contractual arrangements.
The timing was particularly notable because the closure came shortly after Tether executives had publicly discussed ambitious plans for the company’s Bitcoin mining business. CEO Paolo Ardoino had previously spoken about the goal of turning Tether into one of the world’s largest Bitcoin miners.
The company had also said it invested more than $2 billion in energy and mining infrastructure across several sites in Uruguay, Paraguay, and El Salvador.
Tether Continues to Invest in Mining and Energy
Despite ending the project in Uruguay, Tether has not abandoned its plans to expand in the energy sector and Bitcoin mining. Instead, the company continues to broaden its presence in related industries and build its own infrastructure around electricity production and consumption.
One of its most notable moves was an investment in renewable energy producer Adecoagro. Tether acquired a significant stake in the company and later reached an agreement to use part of its surplus electricity for Bitcoin mining.
This model can be particularly attractive for mining operations. If an energy producer generates more electricity than it can sell into the regular grid, the excess capacity can be redirected to mining data centers. This can improve the efficiency of power generation while reducing miners’ dependence on third-party suppliers.
Tether is also developing the technology side of the business. The company released an open-source software solution for managing mining operations and has gradually expanded its involvement in specialized mining hardware and infrastructure.
Tether has also disclosed a stake of approximately 8.2% in Antalpha, a company connected to financial infrastructure for the mining sector. In addition, it is working with Canaan and ACME Swisstech on modular Bitcoin mining systems.
Together, these initiatives show that mining is not simply an experimental side business for Tether, but part of a broader strategy combining energy, computing infrastructure, and digital assets.
The Uruguay Failure Highlights a Core Challenge of Industrial Mining
The situation in Uruguay illustrates just how dependent Bitcoin mining is on reliable energy infrastructure. Even large companies with substantial capital cannot operate mining facilities efficiently without predictable access to electricity.
Equipment costs, data center construction, and technical maintenance all matter, but electricity remains one of the most important factors determining the cost of mining Bitcoin.
If a company cannot secure sufficient power or establish clear terms for expanding capacity, scaling a mining operation becomes significantly more difficult. For this reason, long-term electricity agreements can be just as important to miners as the hardware itself.
In Tether’s case, the problem was made worse by the fact that the two sides interpreted a key part of the contract differently. As a result, investments in physical infrastructure became closely tied to a contractual dispute that eventually stopped the facilities from operating.
Tether Continues to Evolve Into a Diversified Technology Company
Despite the problems in Uruguay, Tether remains one of the largest companies in the digital asset industry and continues to expand its investment portfolio.
According to Reuters, the company’s investment portfolio is valued at around $20 billion and includes more than 100 investments, many of which have not been publicly disclosed.
The company is gradually moving beyond the traditional role of a stablecoin issuer. In addition to USDT, Tether is investing in energy, mining, payment infrastructure, artificial intelligence, telecommunications, and other technology sectors.
For the business, this strategy provides greater diversification while also allowing Tether to build its own infrastructure around the broader digital asset economy.
The Uruguay project was a significant setback, but it has not changed the company’s overall direction. Tether continues to view Bitcoin mining and energy production as important areas for long-term growth.
At the same time, the situation demonstrated that international expansion in the energy sector depends on much more than investment capital. Regulation, agreements with state-owned companies, political changes, and guaranteed access to electricity can all play a decisive role in determining whether such projects succeed.
The experience in Uruguay will likely serve as an important lesson for Tether as it launches new mining operations. The company continues to invest billions of dollars in infrastructure, but the success of future projects will largely depend on how effectively it can combine energy production, long-term power contracts, and its own mining capacity.