Tether Halts Bitcoin Mining in Uruguay Amid Rising Energy Costs

Key Takeaways:

• Tether suspends Bitcoin mining operations in Uruguay.
• Primary reason: Rising energy costs.
• Previous financial dispute with state-owned electricity provider.
• Tether affirms commitment to Latin American projects.

Tether, the company behind USDT, the world's largest stablecoin by market capitalization, has announced a halt to its Bitcoin mining operations in Uruguay. The decision is attributed primarily to the significant increase in energy costs, making the operations economically unsustainable.

A Tether spokesperson confirmed to Cointelegraph on Friday, "We can confirm that we have paused operations in Uruguay." The spokesperson added that the company remains committed to its long-term projects in the Latin American region, despite this development.

This confirmation comes weeks after Tether denied reports that it planned to exit the country, following a $4.8 million debt dispute with a state-owned electricity provider in September. According to a report by local news agency El Observador on Tuesday, Tether formally notified Uruguay’s Ministry of Labor of the suspension of its mining activities and the subsequent dismissal of 30 employees.

Tether's Uruguay Venture: What Went Wrong?

Tether initially announced the launch of “sustainable Bitcoin mining operations” in Uruguay in May 2023, partnering with an unnamed local licensed company. At the time, Paolo Ardoino, now the CEO of Tether and then-chief technology officer, stated that Tether was “leading the way in sustainable and responsible Bitcoin mining by harnessing the power of Bitcoin and Uruguay’s renewable energy capabilities.”

While Tether has not publicly identified its local partners, industry reports have linked the company’s mining operations in Uruguay to the National Administration of Power Plants and Electric Transmissions (UTE) and the local commercial operator Microfin.

In September, local news source Telemundo reported that Tether was abandoning its $500 million investment in Uruguayan mining operations after allegedly failing to pay a $2 million electricity bill to UTE, along with another $2.8 million owed for other local projects. Tether subsequently denied plans to exit the country but confirmed the debt, stating it was actively engaged with the government to “resolve the outstanding friction.”

Of the projected $500 million investment, the company has reportedly spent at least $100 million on mining operations and another $50 million on infrastructure, according to El Observador. Tether did not confirm these figures when contacted by Cointelegraph, stating: “Tether is committed to building long-term initiatives in Latin America, especially projects that harness renewable energy. We continue to evaluate the best way forward in Uruguay and the region more broadly.”