Tether’s Uruguay Bitcoin Mining Plan Ran Out Of Power - Finimize

Tether's first major Bitcoin mining venture in South America has ended in Uruguay, according to Reuters reporting cited by crypto.news on 2026-08-21. Two mining sites in the Florida department, operated locally by Tether's entity Microfin, were left without sufficient power after a dispute with state utility UTE over how much electricity the facilities could draw. The project was estimated to have cost around $120 million, with a former contractor telling Reuters roughly $60 million was spent on each of the two sites. UTE disconnected electricity on July 25, 2025, and Microfin settled the outstanding debt in December, the utility told Reuters. Tether had announced the Uruguay operation in May 2023, calling the country the "perfect platform" for its renewable energy supply and reliable grid.

Background

When Tether announced the Uruguay operation in May 2023, it did not disclose an investment figure, describing the country as the "perfect platform" because of its renewable energy supply and reliable electricity grid. The project was presented as Tether's first major Bitcoin mining venture in South America, with Uruguay serving as a testing ground before potential expansion into Brazil, Paraguay and Argentina. According to a former contractor who worked with the company, Tether 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 let the company test its mining model before committing more capital elsewhere. Reuters also noted that Tether CEO Paolo Ardoino and chairman Giancarlo Devasini have been frequent visitors to the coastal resort of Punta del Este, a city that has attracted wealth. By late 2025, crypto.news reported that the company had informed Uruguay's 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, while another $50 million had been earmarked for infrastructure expected to pass to UTE and Uruguay's National Interconnected System.

What happened

According to Reuters, the collapse centred on a disagreement over how much power Microfin could draw from UTE, according to two former Tether contractors and a source at the state utility. One former contractor said Tether understood a provision in its electricity contract as setting a minimum power allocation that could later be increased, while UTE interpreted the same amount as the maximum level available under the agreement. As demand at the mining facilities increased, the difference became critical; one former contractor told Reuters the sites sometimes lacked enough electricity to operate for days at a time. 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. Two months later, Microfin stopped paying electricity bills, and in June 2025 it informed UTE 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, and 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 no market prices, trading volumes or capital-flow data tied to the collapse, so the financial picture is limited to project-level figures. Reuters, via crypto.news, reported the project was estimated to have cost around $120 million, with a former contractor saying roughly $60 million was spent on each of the two sites. Tether did not disclose an investment figure when it announced the Uruguay operation in May 2023. 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 electricity balance connected to the two sites at roughly $5 million, and UTE told Reuters that Microfin settled the outstanding debt in December. The sources also describe a workforce reduction: crypto.news reported the company informed Uruguay's labor authorities it would cease local operations and had laid off 30 of its 38 employees. No figures are given for any effect on Tether's broader business, on Bitcoin mining economics, or on regional expansion plans into Brazil, Paraguay and Argentina, which the sources describe only as potential targets that were never realised.

Why it matters

The sources frame the Uruguay exit as the end of a venture that was meant to be a template. Tether presented the country in 2023 as its first major Bitcoin mining operation in South America and a testing ground before potential expansion into Brazil, Paraguay and Argentina; a former contractor said the company initially viewed Uruguay as an entry point for a much larger regional mining operation. That plan did not proceed. The dispute also illustrates how a contract-interpretation gap can undo a capital-intensive project: the same electricity provision was read by Tether as a minimum allocation that could later be increased and by UTE as the maximum available, according to a former contractor. Reuters reporting places the disagreement in UTE's internal records by November 2024, with political change in March 2025 and a firmer utility stance following. The sources also describe a sequence of missed payments, a June 2025 termination notice, an unsigned memorandum of understanding and a July 25 disconnection. For a company that publicly cited Uruguay's renewable energy and reliable grid as the reason for choosing it, the outcome is a notable reversal, though the sources offer no assessment of what it means for Tether's mining strategy elsewhere.