Tether ends $120M Bitcoin mining project in Uru...

Tether has abandoned a $120 million Bitcoin mining project in Uruguay after a dispute over electricity supply with state utility UTE left two facilities without enough power, according to a Reuters report cited by crypto.news on 2026-08-21. The project, presented in 2023 as Tether's first major mining venture in South America, was operated locally by its entity Microfin. A former contractor told Reuters Tether spent roughly $60 million on each of the two sites in Uruguay's Florida department. By late 2025, crypto.news reported Tether had told labor authorities it would cease local operations and had laid off 30 of its 38 employees. More than $100 million had already been spent at that time.

Background

Tether announced the Uruguay operation in May 2023, describing the country as the "perfect platform" because of its renewable energy supply and reliable electricity grid. The project was intended as a testing ground before potential expansion into Brazil, Paraguay and Argentina. Tether did not disclose an investment figure at the time. According to Reuters, the core problem was a disagreement over how much power Microfin could draw from UTE. One former contractor said Tether understood a provision in its electricity contract as setting a minimum allocation that could later be increased, while UTE interpreted the same amount as the maximum available. An internal UTE briefing reviewed by Reuters showed the disagreement was already underway by November 2024. Political changes later complicated negotiations: 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. Tether CEO Paolo Ardoino and chairman Giancarlo Devasini have been frequent visitors to Punta del Este, industry sources told Reuters.

What happened

Reuters 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. One former contractor said the sites sometimes lacked enough electricity to operate for days at a time. UTE sources said the dispute concerned the electricity allocation available to Microfin. An internal UTE briefing reviewed by Reuters showed the disagreement was underway by November 2024. Two months after Uruguay's new government took office in March 2025, 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. Tether and Microfin did not respond to the news agency's requests for comment about the contract.

Market impact

The sources provide limited market data. The project was estimated to have cost around $120 million, with a former contractor telling Reuters that Tether spent roughly $60 million on each of the two sites. By late 2025, crypto.news reported that more than $100 million had already been spent, while another $50 million had been earmarked for infrastructure expected to pass to UTE and Uruguay's National Interconnected System. Earlier reporting put the unpaid balance connected to the two sites at roughly $5 million, which Microfin eventually settled in December, UTE told Reuters. The sources do not provide Bitcoin prices, hash rate figures, or broader market flows. They also do not specify how the abandoned capacity compares with Tether's total mining operations. The reported layoffs affected 30 of 38 employees. No figures are given for Tether's overall revenue, stablecoin supply, or mining output.

Why it matters

The collapse ends Tether's first major Bitcoin mining venture in South America, which the company had presented in 2023 as a testing ground before potential expansion into Brazil, Paraguay and Argentina. According to a former contractor who worked with the company, Tether had initially viewed Uruguay as an entry point for a much larger regional mining operation, citing political stability, established infrastructure and an electricity system powered heavily by renewable sources. The Florida facilities were meant to test its mining model before committing more capital elsewhere. The dispute also illustrates how contract interpretation and political change can affect large infrastructure projects: the disagreement over whether a power allocation was a minimum or a maximum became critical as demand increased, and Uruguay's new government appointed new UTE directors who adopted a firmer position on renegotiating the electricity agreement. The sources do not say whether Tether plans to pursue mining elsewhere in the region.