Stablecoin Issuer Tether’s Uruguay Bitcoin Mining Venture Collapses Over Power Supply Dispute

Tether’s Bitcoin mining venture in Uruguay has come to an abrupt end following a protracted disagreement with the country’s state-owned electricity provider over power allocations.

The collapse of the project, estimated by one individual familiar with the details to have involved roughly $120 million in spending, highlights the challenges facing large-scale cryptocurrency mining operations dependent on reliable and expandable energy supplies.

In May 2023, Tether, the issuer of the widely used USDT stablecoin, publicly announced plans to establish Bitcoin mining facilities in Uruguay.

Company executives described the South American nation as a suitable location, citing its substantial renewable energy resources and stable electrical grid.

The initiative formed part of a broader strategy to diversify investments and promote local economic growth through infrastructure development and employment opportunities.

Two mining sites were subsequently developed in the Florida department, with each facility reportedly requiring an outlay of approximately $60 million according to a former contractor involved in the work.Operations initially proceeded without major disruption.

However, tensions emerged over the interpretation of the electricity supply agreement with UTE, Uruguay’s state utility.