Tether’s Uruguay Mining Exit Puts Power Security in Focus

Tether has ended its Bitcoin mining venture in Uruguay after a dispute over electricity rights revealed the risks miners face when power availability is not firmly secured.
The stablecoin giant abandoned a mining project that a former contractor estimated at roughly $120 million after its local operation, Microfin, fell into a dispute with Uruguay’s state-owned electricity provider, UTE.
The disagreement revolved around the amount of electricity Tether’s contract allowed it to consume, according to a Reuters investigation reviewed by Kontan.
The fallout illustrates how a disagreement over contract language, compounded by a change in government, can derail a large-scale investment despite Tether’s roughly $183 billion stablecoin issuance.

Tether announced in 2023 that it planned to establish two Bitcoin mining facilities in Florida Department, Uruguay, citing the country’s renewable energy resources, dependable electricity network, political stability and favorable tax conditions.
Microfin, the company’s Uruguayan subsidiary, operated the two facilities and initially faced few difficulties. The relationship with UTE deteriorated after both sides adopted different interpretations of their electricity agreement.
Tether and a former contractor believed the contracted electricity amount represented a minimum allocation that could rise as the mining facilities expanded.
UTE instead considered the figure a maximum limit, meaning Tether would need to negotiate a separate agreement before drawing additional power, according to sources familiar with the dispute.
Internal UTE records reviewed by Reuters indicate that the disagreement had been developing since at least November 2024. As demand increased, the facilities reportedly experienced insufficient electricity for stretches of several days.

The dispute became more difficult after Uruguay’s new left-wing government took office in March 2025 and appointed UTE executives who took a tougher position on Tether’s efforts to renegotiate its electricity deal.
Microfin stopped paying its power bills in May 2025 and told UTE a month later that it intended to end the contract.
Although UTE’s board approved a memorandum of understanding and prepared a replacement agreement, Tether representatives failed to show up for the signing. With no finalized deal and unpaid bills, UTE cut electricity to the mining sites on July 25, 2025.
Tether informed Uruguay’s labor authorities in November that it planned to shut down the operation and lay off most workers. Microfin cleared its outstanding UTE balance in December 2025.

Tether CEO Paolo Ardoino has said the company has poured more than $2 billion into energy production and Bitcoin mining, with Uruguay initially positioned as a base for potential expansion into Brazil, Paraguay and Argentina.
Talos senior analyst Tanay Ved said miners are increasingly turning to more efficient equipment, cheaper electricity and AI or high-performance computing businesses to offset tighter economics following the April 2024 Bitcoin halving.
Crypto mining specialist Nicolas Ribeiro said Uruguay’s reliable grid and strong connectivity may give it an edge as a destination for AI data centers rather than Bitcoin mining, since mining economics depend heavily on securing consistently cheap power.