• Tether’s Uruguay Bitcoin mining expansion stalled after UTE cut power over nearly $5 million in unpaid bills.
• The project aimed to use Uruguay’s renewable energy to fuel sustainable Bitcoin mining operations.
• Talks with UTE continue, but expansion remains uncertain as costs and guarantees hinder progress.

Tether’s push to expand Bitcoin mining in Uruguay has stalled after the state utility cut power to its local partner. 

UTE, the national electricity provider, halted supply in late July over unpaid bills totaling nearly $5 million. The dispute also froze expansion efforts in the country’s Flores and Florida regions.

Tether’s LATAM Bitcoin Mining Expansion Plan Hits Major Roadblock

The USDT stablecoin operator entered Uruguay in 2023, promising renewable-powered Bitcoin mining. Uruguay’s abundant wind and hydro capacity made it a prime site for sustainable energy projects. 

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Tether partnered with a licensed operator, Microfin, to build facilities and secure long-term electricity deals.

However, tension grew as costs and guarantees mounted. UTE required large deposits to secure the energy contracts, while Microfin sought tariff adjustments. 

Negotiations led to a memorandum of understanding in June, but arrears remained unresolved. The failure to settle debts triggered the shutdown.

Tether had announced broader plans to control about 1% of the global Bitcoin network. The firm pledged hundreds of millions of dollars in South American mining projects, including sites in Paraguay. 

The Uruguayan expansion was meant to anchor those ambitions.

The company has emphasized that USDT reserves remain separate from its operational ventures. Mining revenue and energy assets are intended to diversify Tether’s business beyond stablecoin issuance. 

Earlier this year, it also acquired a stake in Latin American agribusiness to link stablecoin use to commodity trade.

The setback in Uruguay raises questions about the viability of energy-intensive mining in high-cost markets. While Paraguay and Texas have attracted miners with cheaper electricity, Uruguay’s grid is stricter on guarantees. 

For now, Tether’s talks with UTE continue, but the timeline for restarting operations is unclear.

Overall, this highlights the risks in tying stablecoin companies to volatile mining ventures. Tether has not confirmed whether it will scale back or abandon its Uruguay expansion.

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