Tether Holdings Ltd., the world’s largest stablecoin operator, has announced it will wind down its ambitious operations in Uruguay, abruptly canceling a US$500 million plan to build three data centers and a massive 300 MW renewables park. The decision comes after nearly two years of tense negotiations with Uruguay’s state-run utility UTE and a dramatic power cut to two of Tether’s bitcoin mining sites following a ballooning unpaid electricity bill that approached US$4.8 million by late July 2025.
The company’s retreat marks a sharp reversal for Uruguay’s hopes of becoming a regional hub for data infrastructure and renewable-powered cryptocurrency mining. According to company communications cited by Criptolog, Tether will phase out its local power use by the end of 2025 and halt all fresh capital commitments in the country. The move not only halts the planned expansion but also raises tough questions about Uruguay’s ability to attract and retain energy-intensive digital businesses in a rapidly evolving regulatory and economic landscape.
What went wrong? It’s a story of high-stakes investment, regulatory uncertainty, and the relentless math of electricity costs. Tether, through its affiliate Microfin, had already invested over US$100 million into operational bitcoin mining facilities in San Gabriel and Sarandí Grande, with plans to scale up to three data centers across the Florida and Tacuarembó departments. The vision was grand: a 300 MW wind-and-solar park, roughly US$50 million in grid upgrades (to be owned by UTE), and a total demand footprint of 165 MW—enough to make Tether one of the country’s largest single energy consumers.
But as Live Bitcoin News reports, the business case unraveled as electricity tariffs proved too steep and unpredictable for such a power-hungry operation. Tether’s monthly bill was around US$2 million, and despite being among UTE’s largest customers, the company could not secure the volume-based pricing or stable, long-term tariff framework it said was essential for multi-year infrastructure planning. "The absence of a competitive, predictable tariff scheme for projects of our scale has made continued investment unviable," a Tether spokesperson stated in internal communications.
Negotiations with UTE dragged on for nearly two years. Tether pressed for two main options: aligning its Florida power contract with the structure discussed for Tacuarembó, or upgrading from 31.5 kV peajes (toll rates) to 150 kV to better reflect the project’s scale. Although a technical pathway was floated in April 2024, UTE’s board never finalized approval, leaving the matter unresolved. By mid-August 2024, Tether sent an ultimatum letter to UTE, warning that ongoing uncertainty would force the company to freeze the project unless a formal response was received by August 31.
Meanwhile, the financial picture was deteriorating. Tether began defaulting on its electricity bills in May 2025, and by July, arrears had soared to nearly US$4.8 million, not including penalties. Local reports cited by Criptolog and Live Bitcoin News indicate the company’s collateral had been exhausted, and UTE had little choice but to act. On July 25, 2025, UTE cut power to two of Tether’s mining sites, effectively suspending their operations. This was a dramatic turn for a company that, just a year earlier, had praised Uruguay’s power grid as “powerful and dependable, which is fit to mine Bitcoin,” according to Tether’s technology manager Paolo Ardoin.
Efforts to resolve the crisis included a memorandum of understanding signed in June 2025 between UTE president Andrea Cabrera and Tether. The agreement required Tether to stay current on its payments, but with mounting arrears, the deal could not be salvaged. "Despite being among UTE’s larger loads, Tether did not secure a preferential tariff and ultimately chose to step back," Criptolog reports. The company insists its exit is a strategic reset driven by structural pricing constraints, not just the July power cut.
The fallout is significant. The canceled project had been championed by business leader Juan Sartori, a former Uruguayan senator and Tether executive, as a way to position Uruguay at the forefront of data infrastructure anchored in renewables. With expansion opportunities in Brazil also on the table, the shelved plan now prompts a wider debate: can Uruguay attract energy-intensive computing businesses while protecting grid economics and offering competitive rates?
For now, Tether is shifting its focus elsewhere. As Live Bitcoin News details, the company has signed a memorandum of understanding with Adecoagro, a Brazil-based firm in which Tether holds a majority stake, to expand mining activities using renewable energy. Sartori highlighted the group’s new direction: "This venture is looking into a new combination of agriculture, energy, and technology," he said, emphasizing the search for more sustainable and innovative methods of cryptocurrency mining.
Uruguay’s experience with Tether underscores the broader challenges facing countries eager to court digital infrastructure projects. Electricity prices, tariff structures, and regulatory certainty are all crucial factors. Past policy efforts in Uruguay aimed to enable wholesale power contracting and better tap the country’s renewable resources, but large-scale loads like data centers and bitcoin mines often find themselves “out of market” compared to regional alternatives.
Complicating matters further, the regulatory environment for digital assets is changing fast. In July 2025, the GENIUS Act came into force, introducing new rules for stablecoins like Tether. The law establishes issuer approval guidelines, reserve requirements, and tax treatment, aiming to bring greater stability and confidence to the digital currency sector. While the GENIUS Act doesn’t directly address electricity pricing, it adds another layer of compliance for companies looking to operate at scale.
Looking ahead, Uruguay faces a delicate balancing act. The debate over peaje levels (31.5 kV versus 150 kV), long-term contract design, and market-based mechanisms will determine whether the country can offer the predictability and cost-competitiveness that large digital infrastructure projects demand. As Tether’s phased exit unfolds, industry watchers are left to ponder: will Uruguay learn from this high-profile setback and adapt its approach, or will other would-be investors look elsewhere for friendlier economic conditions?
The Tether saga serves as a cautionary tale for both sides. For companies, it’s a reminder that even the most robust power grids and renewable ambitions can be undermined by tariff uncertainty and regulatory friction. For countries like Uruguay, it’s a wake-up call: without clear, competitive frameworks, the promise of becoming a digital infrastructure hub may remain just out of reach.
