Tether Spent $120 Million on Bitcoin Mining in Uruguay. Then the Power Ran Out.

Uruguay appeared to offer Tether an ideal base for bitcoin mining in South America, with abundant renewable energy, a reliable power grid and a reputation for political stability.

In 2023, the cryptocurrency company announced plans to build two mining sites, saying the investment would create jobs, support economic development and expand energy infrastructure. The plans later collapsed after a dispute with Uruguay’s state-owned power utility over how much electricity Tether could use.

A former Tether contractor estimated the company spent about $120 million on the two sites.

The failed project offers a glimpse into how Tether, one of the cryptocurrency industry’s most profitable companies, has been deploying its earnings across sectors including energy, bitcoin mining, artificial intelligence, brain implants and sports.

It also highlights the changing economics of bitcoin mining, which depends heavily on cheap electricity. Lower crypto prices, rising energy costs and the April 2024 reduction in bitcoin mining rewards have pushed miners to seek cheaper power, more efficient equipment or alternative uses for their computing capacity.

Tether’s ability to quickly enter and leave Uruguay reflects the “hypermobile” nature of bitcoin mining, said Pete Howson, an assistant professor at Northumbria University.

“This plug-and-play infrastructure is very easy to do — literally pulling the plug and then move it to somewhere else,” he said.

Tether announced its Uruguay operation in May 2023, calling the country the “perfect platform” because of its renewable energy and robust electricity grid. It said it would be “investing resources into energy production,” without giving further details.

A former Tether contractor said Uruguay was intended as a “first step” toward a wider South American mining operation. The person estimated Tether spent about $60 million on each of two facilities in the department of Florida, with the country intended as a testing ground before expansion into Brazil, Paraguay and Argentina. Tether has since announced bitcoin mining investments in Brazil.

Tether, based in El Salvador, controls about $183 billion worth of its USDT stablecoin. Its reserves have made it one of the world’s largest holders of U.S. Treasuries, generating billions of dollars in profits that have helped finance a portfolio of investments valued by the company at about $20 billion.

A promotional video posted by Tether on X in February 2024 showed rows of mining buildings surrounded by farmland, with wind turbines in the background. Road signs featured crypto references such as “Memepool Avenue” and “Halving Street,” according to the video, which Reuters verified.

The operation initially ran smoothly, according to two former contractors. It later became embroiled in a dispute with UTE, Uruguay’s state electricity utility.

Tether believed its contract allowed electricity supply to be increased, while UTE viewed the contracted amount as a maximum allocation, according to one former contractor. Sources at UTE said the dispute concerned how much power Tether’s local entity, Microfin, was entitled to receive.

An internal UTE briefing reviewed by Reuters showed the disagreement had begun by November 2024. As demand increased, the mining sites were left without sufficient electricity for days at a time, the former contractor said.

The dispute intensified after a new left-leaning government took office in March 2025 and appointed new directors at UTE, according to sources. Microfin stopped paying its electricity bills and notified UTE in June that it intended to terminate its contracts, the utility’s briefing showed.

The two sides attempted to negotiate a revised agreement, but Tether representatives did not attend the signing of a memorandum of understanding, according to UTE records. The utility cut power to the sites on July 25.

Tether told Uruguay’s labor authorities in November that it would cease operations and lay off most staff, local newspaper El Observador reported. Microfin settled its outstanding debts in December, UTE told Reuters.

The collapse came as bitcoin mining became less profitable. Miners have increasingly sought cheaper energy or shifted their computing capacity toward artificial intelligence and high-performance computing, said Tanay Ved, a senior research analyst at Talos.

Crypto mining expert Nicolas Ribeiro described the industry as “extremely dynamic,” with operators constantly opening, closing and relocating facilities.

Uruguay’s reliable power grid and strong internet connectivity may make it better suited to AI data centers than bitcoin mining, Ribeiro said. While the country is a leader in renewable energy, its electricity costs are relatively high.

“Uruguay isn’t viable for mining — that’s the reality,” he said.

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