Tether has ended its ambitious Bitcoin mining project in Uruguay after a prolonged electricity dispute left two mining facilities struggling to secure enough power for consistent operations.
The stablecoin giant reportedly invested around $120 million across the two sites in Uruguay’s Florida department. However, disagreements between Tether’s local operator, Microfin, and state-owned electricity provider UTE eventually led to the facilities being disconnected from the grid.
The setback brings an end to what was originally intended to become Tether’s first major Bitcoin mining operation in South America. Despite the withdrawal, the company continues to invest heavily in mining, renewable energy and related infrastructure elsewhere.
Tether’s $120 Million Bitcoin Mining Expansion Falls Apart
Tether entered Uruguay in 2023 with plans to use the country as a testing ground for a broader South American Bitcoin mining strategy.
According to people familiar with the operation, approximately $60 million was invested in each of the two facilities, bringing the estimated total to around $120 million.
When Tether originally announced the project, it highlighted Uruguay’s large supply of renewable electricity and reliable power infrastructure as major advantages.
The country was expected to provide an ideal environment for developing energy-efficient Bitcoin mining operations before Tether potentially expanded further into markets such as Brazil, Paraguay and Argentina.
Those plans ultimately ran into a critical problem: access to electricity.
Electricity Dispute Becomes the Main Problem
The disagreement centered on how much electricity Tether’s local entity, Microfin, was permitted to draw from UTE.
According to people familiar with the negotiations, Tether interpreted its electricity agreement as providing a minimum allocation that could later be increased as the mining operation expanded.
UTE reportedly viewed the same figure differently, treating it as the maximum amount of electricity available under the agreement.
That difference became increasingly important as the mining facilities required more power.
Bitcoin mining operations consume large amounts of electricity because thousands of specialized computers operate continuously to secure the network and compete for block rewards. Without a predictable supply of affordable electricity, maintaining profitable mining operations becomes extremely difficult.
Former contractors said the Uruguay facilities sometimes went days without enough electricity to operate normally.
UTE Disconnects Tether Mining Facilities
The dispute had reportedly become serious by November 2024, but negotiations continued into the following year.
Political changes in Uruguay added another layer of complexity. A new government took office in March 2025 and new directors were appointed at UTE.
According to people familiar with the discussions, the utility subsequently took a firmer position during negotiations over the electricity agreement.
By May 2025, Microfin had stopped paying its electricity bills. The company then informed UTE in June that it intended to terminate its contracts.
Both sides still attempted to reach a compromise.
UTE approved revised contract documents and a memorandum of understanding that could have allowed the mining operation to continue. However, Tether representatives reportedly did not attend the scheduled signing.
With the new agreement unsigned and outstanding electricity bills remaining, UTE disconnected the two facilities from the power grid on July 25, 2025.
The unpaid electricity balance associated with the sites was reported to be roughly $5 million. Microfin eventually settled the outstanding debt in December.
Uruguay Was Supposed to Lead Tether’s South American Expansion
Tether’s decision to enter Uruguay was part of a much larger regional strategy.
The country offered several characteristics that initially made it attractive for cryptocurrency mining, including political stability, established infrastructure and an electricity system heavily supported by renewable energy.
Tether planned to use the Florida department facilities to test its mining model before committing additional capital elsewhere in Latin America.
Early operations reportedly performed well, and the company promoted the facilities as an example of how Bitcoin mining could operate alongside renewable energy infrastructure.
However, the economics of large-scale mining depend heavily on reliable access to inexpensive electricity. Once power availability became uncertain, the original advantages of operating in Uruguay became far less significant.
By late 2025, Tether had decided to wind down its local operations and reportedly laid off 30 of its 38 employees.
Tether Continues Bitcoin Mining in Brazil
The failure of the Uruguay project does not mean Tether is abandoning Bitcoin mining.
Instead, the company has continued expanding its mining strategy elsewhere.
In July 2025, Tether signed an agreement with Latin American agricultural company Adecoagro to use renewable electricity for Bitcoin mining in Brazil.
Adecoagro had more than 230 megawatts of renewable generation capacity and planned to use Bitcoin mining as a way to monetize surplus electricity.
The arrangement gives the agricultural company another potential source of revenue from energy that might otherwise be sold on the spot market.
For Tether, the project supports its broader strategy of connecting Bitcoin mining with renewable power generation.
Tether Has Invested Billions in Mining and Energy
Tether’s mining ambitions extend far beyond individual facilities.
CEO Paolo Ardoino has said the company invested more than $2 billion in energy production and Bitcoin mining.
Tether has also invested directly in mining and infrastructure businesses.
The company recently sold 627,000 shares of Bitcoin mining and AI infrastructure company Bitdeer for approximately $12.7 million. Despite reducing its position, Tether retained a 19.7% stake in the company.
Its strategy also includes mining software.
In February 2026, Tether released MiningOS as open-source software. The platform is designed to help operators manage Bitcoin mining installations ranging from smaller setups to industrial-scale facilities.
Tether followed this with an open-source Mining Development Kit in April, providing developers with tools for controlling and automating mining equipment through a standardized framework.
These initiatives show that Tether remains committed to building a broader Bitcoin mining ecosystem despite its costly exit from Uruguay.
Stablecoin Profits Are Funding Tether’s Expansion
Tether has been able to finance investments in mining and other industries largely through profits generated by its stablecoin business.
The company controls roughly $183 billion in stablecoins and holds substantial reserves backing those tokens.
Tether reported approximately $1.04 billion in net profit for the first quarter of 2026.
Its quarterly attestation showed total assets of about $191.77 billion compared with liabilities of approximately $183.54 billion.
The company also reported exposure to around $141 billion in U.S. Treasuries.
Those profits have allowed Tether to diversify well beyond stablecoins and cryptocurrencies.
Its investments now extend into areas including data centers, artificial intelligence infrastructure, video platforms, brain-computer interface technology and professional sports.
Bitcoin Mining Economics Are Becoming More Difficult
Tether’s Uruguay exit also highlights the broader economic challenges facing Bitcoin miners.
The April 2024 Bitcoin halving reduced mining rewards by half, significantly changing the economics of the industry.
Miners must now generate returns with smaller block rewards while still paying for electricity, equipment, maintenance, cooling and infrastructure.
At the same time, older mining machines have become increasingly difficult to operate profitably.
By mid-2026, hashprice — a measure of mining revenue generated from computing power — had fallen into the high-$20 range per petahash per day.
Some older machines were estimated to require around $35 per petahash per day just to reach breakeven levels.
Financial pressure has also pushed publicly traded mining companies to sell portions of their Bitcoin holdings. Public miners reportedly sold more than 32,000 BTC during the first quarter of 2026.
Bitcoin Miners Increasingly Turn Toward AI
One of the biggest changes in the mining industry has been the growing shift toward artificial intelligence and high-performance computing.
Bitcoin mining companies already operate large data centers with significant electricity supplies, cooling infrastructure and computing expertise.
As Bitcoin mining margins have tightened, some operators have started redirecting portions of their infrastructure toward AI workloads.
Public Bitcoin miners had reportedly secured more than $70 billion worth of AI and high-performance computing contracts by mid-2026.
This transition could become particularly relevant for countries such as Uruguay.
While the country offers a reliable electricity grid and strong internet infrastructure, relatively expensive power can make traditional Bitcoin mining less attractive.
AI data centers may be able to generate greater revenue from the same electricity and infrastructure, making them a potentially more viable alternative.
What Tether’s Uruguay Exit Means for Its Mining Strategy
The collapse of Tether’s $120 million Uruguay project represents a significant operational setback, but it does not appear to have changed the company’s broader commitment to Bitcoin mining.
Instead, the experience highlights one of the industry’s most important realities: electricity agreements can determine whether a mining operation succeeds or fails.
Even modern equipment and renewable energy access cannot compensate for unreliable or economically unfavorable power arrangements.
Tether is now continuing its mining expansion through other projects, particularly those connected to renewable energy in Brazil, while also investing in mining companies, software and infrastructure.
At the same time, the wider mining industry is changing rapidly as companies search for cheaper electricity, more efficient machines and opportunities in AI and high-performance computing.
For Tether, the Uruguay project may ultimately serve as an expensive lesson in the importance of long-term power availability as it continues building its global Bitcoin mining and energy strategy.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial or investment advice.
