Tether Exits Uruguay: $500M Bitcoin Mining Bet Crumbles Over Electricity Prices

(MENAFN- Crypto Breaking) Tether Holdings has officially suspended all its Bitcoin mining activities in Uruguay. The company cited electricity tariffs that proved unsustainable despite the country's near-100% renewable energy grid. The decision ends a two-year push into what was once seen as one of Latin America's most promising renewable-powered mining hubs.

The decision to suspend its operations is as a direct result of failed negotiations with state-owned utility UTE over high-voltage electricity tariffs. Sources familiar with the talks said rates were between $60 and $180 per megawatt-hour, which is more expensive compared to other competing jurisdictions, making Tether's operations in Uruguay economically unfeasible.

The issue escalated due to an outstanding balance between $4.8 and 5 million, with approximately $2 million in unpaid power bills from May 2025 onward and an additional $2.8 to 3 million tied to related infrastructure and ancillary projects.

On November 27, 2025, Tether notified Uruguay's Ministry of Labor (MTSS) of the suspension, effectively laying off 30 out of its total of 38 local employees immediately. A small team has been retained to manage equipment removal and site closure by year's end.

According to local media outlet El Observador, the development is a“warning signal” for the cryptocurrency sector of Uruguay, as Tether was the last major Bitcoin mining operator in the country. Uruguay generates 98% of its electricity from renewable sources, primarily hydro and wind, a figure that has risen from the 94% commonly cited during the project's 2023 launch.

Two Years From Green Promise to Complete Shutdown

The sustainable Bitcoin mining project began in May 2023 when then-CTO Paolo Ardoino announced a partnership with UTE and local company Microfin to develop three data centers and a 300 MW renewable energy park.

Tether committed up to $500 million to the program, with around $100 million already invested in mining hardware and another $50 million in UTE-owned infrastructure. A memorandum of understanding in June 2023 secured long-term power commitments, and initial deployment has gone well.

Then troubles began in May 2025 after Tether's local partner defaulted on its payments, triggering arrears. UTE disconnected power to two facilities on July 25 over the unpaid balance. Despite Tether's position that a warranty deposit covered the debt, talks over revised 150 kV tariffs ultimately collapsed.

A September 2025 letter from Tether to UTE warned that without“a competitive and predictable tariff framework,” the company would be forced to reassess its strategy, a warning that has now materialized.

Tether is redirecting mining focus to lower-cost jurisdictions, including 40 to 70 MW sites in Paraguay and El Salvador, a recently signed renewable-energy memorandum with Brazilian agribusiness giant Adecoagro, and its overall corporate relocation to El Salvador completed earlier this year.

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