Tether has abandoned its Bitcoin mining operation in Uruguay, walking away from two facilities that cost an estimated $120 million following a prolonged dispute with state utility UTE over the amount of electricity available to the sites. The decision ends the USDT issuer's first venture into South American mining.

Contract ambiguity at the heart of the dispute

According to two former Tether contractors and a source at state utility UTE cited by Reuters, the company's local operator, Microfin, and the utility never reached agreement on how much electricity the mining sites were entitled to draw.

UTE — Administración Nacional de Usinas y Trasmisiones Eléctricas — is the state company that controls the bulk of Uruguay's electricity generation, transmission and distribution.

One former contractor told Reuters that Tether viewed a figure in its supply contract as a minimum that could be scaled upward, while UTE maintained the number was a hard maximum. The disagreement had little practical effect while the facilities were small, but it became a significant obstacle as the sites grew in size and productivity. The contractor said there were periods when the mines went days without enough power to operate. Electricity is the largest operating cost in Bitcoin mining, and the hardware is run around the clock, which makes firm access to power a basic requirement for industrial-scale sites.

An internal UTE briefing reviewed by Reuters indicated the two sides were already at odds by November 2024.

Unpaid bills and an abandoned signing

Uruguay's new left-leaning administration under President Yamandú Orsi took office in March 2025 and installed new directors at UTE, leaving the utility less inclined to rework the deal, one former contractor told Reuters. By May, Microfin had stopped paying its electricity bills, and in June it notified UTE of its intention to end the contracts.

A final effort to salvage the arrangement collapsed after UTE's board approved a memorandum of understanding and revised paperwork, but Tether's representatives failed to appear for the signing, according to meeting minutes included in the briefing.

With nothing signed and roughly $5 million in bills outstanding, UTE cut power to both sites on July 25. Microfin subsequently settled the debt in December, the utility told Reuters.

Tether's $120 million Uruguay bet unravels

Tether, whose dollar-pegged USDT is the largest stablecoin by market value, described Uruguay as the "perfect platform" when it unveiled the operation in May 2023, citing the country's renewable power supply and dependable grid. Uruguay generates the vast majority of its electricity from renewable sources — hydropower, wind, solar and biomass — following a decade-long build-out of wind capacity. The two sites, located in the Florida department north of Montevideo, were intended as an initial testing ground before the company expanded mining into Brazil, Paraguay and Argentina. Tether's reported spend per site was around $60 million.

More than $100 million had been invested in the project by late 2025, with an additional $50 million set aside for infrastructure that was meant to eventually transfer to UTE and Uruguay's National Interconnected System. A February 2024 company video showed mining halls surrounded by farmland and wind turbines, with access roads named "Memepool Avenue" and "Halving Street."

Reuters reported that CEO Paolo Ardoino and chairman Giancarlo Devasini were regular visitors to the resort town of Punta del Este, where billionaire Peter Thiel is reportedly building a $10 million compound.

The Uruguay setback has not slowed Tether's mining ambitions across the region. In July 2025, the same month UTE pulled the plug on the partnership, the USDT issuer struck a deal with agricultural producer Adecoagro — a company it had moved to take control of earlier that year — to mine Bitcoin using renewable power in Brazil, effectively replacing the failed South American testing ground in less than one month. Mining is one arm of a diversification beyond the stablecoin issuer's core business, which has also included stakes in data-center operator Northern Data and video platform Rumble, and Tether executives have said they aim for roughly 1% of the global Bitcoin hash rate.