Tether has abandoned two Bitcoin mining sites in Uruguay after a dispute with state utility UTE over electricity supply left the facilities without enough power to run. The project cost an estimated $120 million, and Uruguay's state utility disconnected the sites in July 2025 after unpaid bills went unresolved. Tether keeps investing in mining elsewhere even as the industry leans harder on AI to offset weaker economics.
Tether's plan to build a Bitcoin mining hub in Uruguay has collapsed after a dispute over electricity allocation with state utility UTE left two facilities short of power for days at a time. One person with direct knowledge estimated the project likely cost around $120 million, a former contractor told Reuters, with roughly $60 million spent on each of the two sites in the department of Florida.
Electricity dispute sinks the project
Tether read a clause in its UTE contract as setting a minimum power allocation that could later be increased, while UTE treated the same clause as a maximum, according to two former contractors and a source at the utility. As demand at the sites rose, the shortfall left the facilities without enough electricity for days at a time. An internal UTE briefing showed the disagreement was already underway by November 2024.
Two months after Uruguay's new left-leaning government took office in March 2025 and installed new UTE directors, Tether's local entity Microfin stopped paying its electricity bills and told UTE in June 2025 that it would terminate its contracts.
Both sides tried to salvage the deal — UTE's board approved a memorandum of understanding and revised contract texts — but Tether representatives did not attend the scheduled signing. With the agreement unsigned and bills outstanding, UTE cut power to the sites on July 25, 2025. Microfin settled the outstanding debt in December.
Tether keeps investing in mining despite the exit
The Uruguay withdrawal has not stopped Tether's broader mining push. Tether signed a mining agreement with Adecoagro in July 2025 to use renewable electricity in Brazil, and it has since released open-source mining software, MiningOS, along with a Mining Development Kit for controlling hardware.
Those investments draw on profits from Tether's stablecoin business. Tether controls about $183 billion in stablecoins, Reuters reported. The company also reported $1.04 billion in net profit for the first quarter of 2026, according to its quarterly attestation.
The exit also lands amid a tougher stretch for miners, whose revenue took a hit from the April 2024 halving. By mid-2026, hashprice had fallen into the high-$20 range per petahash per day, a measure of miner revenue per unit of computing power. Public mining companies sold more than 32,000 BTC in the first quarter of 2026 as financial pressure increased.
Mining specialist Nicolas Ribeiro said Uruguay's grid suits AI data centers better than mining given its relatively high power costs. Ribeiro told Reuters: "Uruguay isn't viable for mining — that's the reality,"
Sources: crypto.news, Commodities & Futures News
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