Tether’s Bitcoin mining venture in Uruguay has come to an abrupt end following a protracted disagreement with the country’s state-owned electricity provider over power allocations.

The collapse of the project, estimated by one individual familiar with the details to have involved roughly $120 million in spending, highlights the challenges facing large-scale cryptocurrency mining operations dependent on reliable and expandable energy supplies.

In May 2023, Tether, the issuer of the widely used USDT stablecoin, publicly announced plans to establish Bitcoin mining facilities in Uruguay.

Company executives described the South American nation as a suitable location, citing its substantial renewable energy resources and stable electrical grid.

The initiative formed part of a broader strategy to diversify investments and promote local economic growth through infrastructure development and employment opportunities.

Two mining sites were subsequently developed in the Florida department, with each facility reportedly requiring an outlay of approximately $60 million according to a former contractor involved in the work.Operations initially proceeded without major disruption.

However, tensions emerged over the interpretation of the electricity supply agreement with UTE, Uruguay’s state utility.

Tether’s local subsidiary, known as Microfin, understood a key contractual provision as establishing a baseline power level that could be expanded as mining demand grew.

In contrast, UTE regarded the specified quantity as a firm upper limit that could not be surpassed.

This fundamental difference of opinion became evident by late 2024 and intensified after a change in national administration in March 2025, when newly appointed utility directors adopted a firmer negotiating stance.Efforts to renegotiate the terms continued into the following year.

Microfin eventually halted electricity payments and formally notified UTE in June 2025 of its intention to end the existing contracts.

Although both parties explored a revised memorandum of understanding and updated contract language, which received approval from the utility’s board, representatives from Tether’s side did not appear for the formal signing.

With the agreement left incomplete and outstanding invoices accumulating, UTE disconnected electricity to the mining facilities on July 25, 2025.

By November 25 of that year, Tether informed Uruguayan labor authorities that it would wind down operations at the sites and dismiss the majority of its local workforce.

Microfin later resolved the unpaid electricity bills in December, according to information provided by UTE.

The abandoned facilities now stand as a costly reminder of the venture’s failure, with little tangible infrastructure remaining to demonstrate the scale of the original commitment.

The episode occurs against a backdrop of shifting economics in Bitcoin mining globally, where energy costs and contractual certainty play increasingly decisive roles.

While Tether has pursued mining-related investments in other markets, including renewable projects elsewhere in Latin America, the Uruguay experience underscores the risks of relying on negotiated power arrangements that may be subject to differing interpretations or political transitions. As reported by Reuters, the company did not provide comments in response to inquiries about the matter.