Tether’s Bitcoin Mining Push in Uruguay Unraveled Over an Energy Dispute

Tether, the company behind the world’s largest stablecoin, spent roughly $120 million on two bitcoin mining sites in Uruguay that were ultimately abandoned after a dispute with the state utility over electricity supply, a Reuters review of documents and interviews has found.

A “perfect platform” that soured

In May 2023, Tether announced it would launch bitcoin mining operations in Uruguay, calling the country the “perfect platform” for its abundant renewable energy, without disclosing an investment value. It set up two sites in the rural department of Florida, spending roughly $60 million on each, according to a former Tether contractor.

The project was intended as a “first step” for Tether’s mining push across South America, serving as a testing ground before the company moved into bigger markets such as Brazil, Paraguay and Argentina. Tether has since announced mining investments in Brazil.

The dispute over power

The project began to unravel over a fundamental disagreement about electricity with state utility UTE. Tether believed a clause in its contract represented a minimum level of supply that could later be increased, while UTE treated the contracted amount as a maximum that could not be exceeded, a former contractor said.