Tether has abandoned a Bitcoin mining expansion in Uruguay after a dispute with state electricity provider UTE left two facilities without sufficient power, bringing to an end a project estimated to have cost about $120m.
The cryptocurrency company withdrew from two sites in Florida department after disagreements over electricity allocations disrupted operations. Its Uruguayan subsidiary, Microfin, subsequently terminated its contracts with UTE, according to Reuters.
Tether announced the project in May 2023 as its first major Bitcoin mining operation in South America. Uruguay was intended to act as a testing ground before a possible expansion into Brazil, Paraguay and Argentina.
A former contractor told Reuters that Tether spent approximately $60m on each of the two sites. The company did not disclose a total investment when it launched the operation, but described Uruguay as the “perfect platform” because of its renewable energy supply and reliable electricity grid.
By late 2025, Tether had told Uruguay’s labour authorities it would end its local operations and had dismissed 30 of its 38 employees, crypto.news reported. More than $100m had already been spent, while a further $50m had been set aside for infrastructure expected to be transferred to UTE and Uruguay’s National Interconnected System.
The central problem was a disagreement over the amount of electricity Microfin was entitled to draw from UTE, according to two former Tether contractors and a source at the state utility.
One former contractor said Tether viewed a clause in its electricity contract as establishing a minimum allocation that could later be raised. UTE, however, interpreted the same figure as the maximum amount available under the agreement.
As the mining sites increased their energy demand, the disagreement became more serious. One former contractor said the facilities were sometimes unable to operate for several days because they did not have enough electricity.
Sources at UTE also confirmed that the dispute involved Microfin’s electricity allocation. The company operated in Uruguay on Tether’s behalf.
An internal UTE briefing seen by Reuters indicated that the disagreement was already under way by November 2024. Tether and Microfin did not respond to Reuters requests for comment on the contract.
Contracts terminated
The negotiations became more complicated after Uruguay’s political change in March 2025, when a new left-leaning government took office and appointed new directors to UTE.
One former contractor told Reuters that the utility then adopted a tougher position in discussions about renegotiating the electricity agreement.
Microfin stopped paying its electricity bills two months later. According to UTE’s internal briefing, the company told the utility in June 2025 that it planned to terminate its contracts.
Both sides nevertheless tried to keep the project alive. UTE’s board approved a memorandum of understanding and revised contract documents, but minutes included in the briefing showed that Tether representatives did not attend the planned signing.
With no agreement signed and bills unpaid, UTE disconnected power to the facilities on 25 July. Earlier reports estimated that the outstanding debt linked to the two sites was about $5m.
UTE told Reuters that Microfin eventually paid the debt in December.
A former contractor who worked with Tether said the company had initially regarded Uruguay as a gateway to a much larger regional mining operation.
The country offered political stability, established infrastructure and an electricity network heavily powered by renewable sources. The Florida facilities were intended to allow Tether to test its mining model before investing further elsewhere.
Industry sources also told Reuters that Tether chief executive Paolo Ardoino and chairman Giancarlo Devasini had frequently visited Punta del Este, the coastal resort city. The area has attracted wealthy foreign residents and technology investors, including billionaire Peter Thiel, who is building a reported $10m residential compound nearby.
Early operations at Tether’s sites generated revenue and were initially managed effectively, according to two former contractors. A company video released in February 2024 showed rows of mining buildings surrounded by farmland and wind turbines. The internal roads reportedly had crypto-themed names such as “Memepool Avenue” and “Halving Street”.
The withdrawal from Uruguay has not brought an end to Tether’s mining activity in the region.
In July 2025, Tether signed an 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 monetise surplus power.
Adecoagro chief executive Mariano Bosch said the arrangement could help the company secure a price for electricity that would otherwise be sold on the spot market, while also providing exposure to Bitcoin.
Ardoino said the Brazil agreement was part of Tether’s commitment to mining powered by renewable energy.
Mining remains part of Tether strategy
Mining continues to form part of Tether’s investment strategy despite the Uruguay shutdown.
Ardoino said at an industry conference in 2025 that Tether had invested more than $2bn in energy production and Bitcoin mining, according to Reuters.
The company has also invested in mining-related businesses. In June, it sold 627,000 shares in Bitdeer for about $12.7m, while retaining a 19.7% stake in the Bitcoin mining and artificial intelligence infrastructure company. The shares were sold for approximately $20 each.
Tether’s involvement also extends to software used to operate mining facilities. In February 2026, it released MiningOS as open-source software, offering a system intended to manage operations ranging from small home installations to large industrial sites.
In April, the company released an open-source Mining Development Kit, giving developers tools to control and automate mining hardware through a shared software framework.
Those projects are funded in part by profits from Tether’s stablecoin business. Reuters reported that the company controls about $183bn worth of stablecoins and that assets backing its tokens have made it one of the world’s largest holders of United States government debt.
Tether’s quarterly attestation showed net profit of $1.04bn for the first quarter of 2026. It reported total assets of $191.77bn and liabilities of $183.54bn, with exposure to US Treasury securities of about $141bn.
Reuters reported that profits from the stablecoin business have also been invested in data centres, video platform Rumble, brain-computer interface companies and Italian football club Juventus.
The Uruguay closure comes during a difficult period for Bitcoin miners. Their income was reduced by the April 2024 halving, which cut the block subsidy paid to miners by 50%, while subsequent pressure on Bitcoin prices added to the strain.
Mining companies have been forced to use more efficient equipment, find cheaper electricity or seek alternative uses for their power and data-centre infrastructure.
By the middle of 2026, hashprice a measure of mining revenue generated by each unit of computing power had fallen into the high-$20s per petahash per day. Research on miners’ finances published in July estimated that older machines required about $35 to break even.
Publicly listed mining companies sold more than 32,000 BTC in the first quarter of 2026 as financial pressure intensified.
Some operators have begun directing electricity and facilities towards artificial intelligence and high-performance computing. A June analysis found that public Bitcoin miners had secured more than $70bn in AI and HPC contracts.
A tracked group of mining shares had risen by more than 50% in 2026, even though Bitcoin had fallen by about 17% over the period measured.
Tanay Ved, a senior research analyst at Talos, told Reuters that miners were responding to tighter economics by buying more efficient hardware, securing cheaper electricity or redirecting computing infrastructure towards AI and high-performance workloads.
Mining specialist Nicolas Ribeiro said Uruguay’s dependable power grid and strong internet connectivity could make it more suitable for AI data centres. However, he added that relatively expensive electricity weakened the economic case for Bitcoin mining there.
