When Tether, the world’s largest stablecoin issuer, announced in May 2023 that it would launch a $500 million Bitcoin mining operation in Uruguay, the move was hailed as a bold step toward sustainable, renewable-powered crypto infrastructure in South America. But just 18 months later, the project has come to an abrupt halt, leaving behind unfinished data centers, millions in unpaid electricity bills, and a raft of questions about the viability of large-scale digital asset ventures in the region.
The decision to pull the plug was confirmed on November 27, 2025, after Tether executives met with Uruguay’s Ministry of Labor and Social Security at the National Directorate of Labor (Dinatra). According to El Observador, the company notified authorities that it would permanently cease local mining operations and lay off 30 of its 38 Uruguay-based employees—an announcement that triggered immediate debate about the country’s energy policies and digital future.
At the heart of Tether’s withdrawal lies a simple but stubborn problem: energy costs. Uruguay’s electricity tariffs for commercial and industrial customers range from $60 to $180 per megawatt-hour, depending on the time and location. For a company whose business model depends on vast, energy-intensive data centers running day and night, these rates proved unsustainable. Tether’s ambitious plan—three data processing centers and a 300-megawatt renewable energy park, primarily in the Florida and Tacuarembó provinces—quickly ran into economic headwinds.
By the time the decision was made, only about $100 million of the planned $500 million investment had been deployed. Another $50 million, earmarked for infrastructure that would eventually be handed over to Uruguay’s state utility, Administración Nacional de Usinas y Trasmisiones Eléctricas (UTE), was also set aside. Yet, as operational costs mounted, Tether found itself unable to justify further capital deployment. According to Crypto.news, negotiations with UTE over more competitive energy rates began as early as November 2023. Tether proposed shifting to higher-voltage tariff bands—specifically, from 31.5 kV to 150 kV—and revising its power purchase agreements to better match the scale of its infrastructure. But those proposals were ultimately rejected.
“A competitive and predictable tariff framework is essential for projects of this scale,” Tether stated in an official letter to UTE in August 2024, reiterating that failure to reach an agreement would force it to rethink its strategy in Uruguay. According to Wu Blockchain and El Observador, the company’s frustration was compounded by operational challenges after its local partner defaulted on payments to UTE, leading to the suspension of power supply at multiple mining sites. By July 2025, UTE had disconnected two Tether facilities due to unpaid debts that reached approximately $5 million, a figure Tether claimed was covered by a warranty deposit.
The financial dispute quickly became public. Local media, including Busqueda and Telemundo, reported that Tether’s total outstanding debt—including other local projects—approached $4.8 million, not counting fines or extra charges. While Tether acknowledged these outstanding amounts, it insisted that unresolved contract terms, not a single unpaid bill, were at the core of its dispute with UTE. In statements to the press, company executives emphasized their ongoing commitment to the region and stated, “Tether supports these efforts and aims for a positive solution that shows our long-term commitment to sustainable opportunities in the area.”
Despite these assurances, the writing was on the wall. In September 2025, rumors swirled about Tether’s impending exit from Uruguay, but the company publicly denied any withdrawal, telling CriptoNoticias that it was still evaluating the best path forward for its Latin American initiatives. However, as negotiations stalled and operational losses mounted, Tether’s initial optimism gave way to reality. The company began winding down its Uruguay operations, laying off the majority of its staff and preparing to transfer ownership of its three unfinished data centers to UTE and the National Interconnected System.
The collapse of the Uruguay venture is a setback for Tether’s broader Latin American ambitions. The stablecoin issuer had hoped to capitalize on Uruguay’s reputation as a leader in renewable energy, touting the project as a model for sustainable Bitcoin mining. Paolo Ardoino, Tether’s CTO, was bullish at the project’s launch, saying, “By harnessing the power of Bitcoin and Uruguay’s renewable energy capabilities, Tether was leading the way in sustainable and responsible Bitcoin mining.” But as global energy prices climbed and local regulatory frameworks failed to keep pace with the demands of digital infrastructure, the project’s economic model unraveled.
Not all is lost for Tether, however. Even as it retreats from Uruguay, the company has continued to expand its footprint elsewhere in Latin America. In 2025, Tether relocated its headquarters to El Salvador, attracted by the country’s pro-Bitcoin policies and crypto-friendly regulations. It also signed a memorandum of understanding with Adecoagro to power a renewable energy-driven mining initiative in Brazil and acquired Parfin, a Latin America-based digital asset custody platform, to deepen its institutional presence in the region.
For Uruguay, the episode has reignited debate about the country’s readiness to support large-scale digital infrastructure projects. The abrupt shutdown has left some policymakers and analysts questioning whether the nation’s current tariff and regulatory frameworks are compatible with the needs of global technology investors. Several experts cited by El Observador argued that Tether’s proposal to migrate to higher-voltage tariffs could have helped UTE save money and avoid building unnecessary grid structures, but the lack of agreement ultimately doomed the project.
Meanwhile, Tether has not entirely ruled out a future return to Uruguay. In its most recent public comments, the company said it is evaluating alternative structures that might allow it to participate in the country’s energy and technology sectors under more favorable terms. Still, the rollback of its original plans highlights just how quickly large-scale investment decisions can shift when energy costs and regulatory hurdles mount. For now, the empty data centers in Florida and Tacuarembó stand as a stark reminder of the challenges facing digital asset infrastructure in emerging markets.
As Tether’s experience in Uruguay demonstrates, the dream of sustainable, large-scale crypto mining may be just out of reach—at least until local economies and global tech giants can find common ground on the cost of power.
