Tether has abandoned a roughly $120 million Bitcoin mining project in Uruguay after a dispute over electricity supply with the country’s state power company escalated into unpaid bills, a power cutoff and layoffs.

The failed investment had been positioned as a starting point for wider growth in South America. Its collapse highlights a basic challenge for large mining operations: abundant renewable energy is not enough if pricing, supply levels and contract terms remain contested.

Two sites in Florida department

Tether entered Uruguay in May 2023, presenting the country as an attractive location for Bitcoin mining because of its renewable-energy base and established grid. The company said at the time it would invest in energy production and develop sustainable mining operations with a locally licensed company.

It went on to invest about $60 million in each of two sites in Uruguay’s rural Florida department, according to the report. Tether did not publicly disclose the value of the project. At around $120 million, the investment would amount to roughly 6% of Uruguay’s annual foreign direct investment.

Dispute over how much power was guaranteed

The mining sites initially produced revenue, but the relationship with UTE, Uruguay’s state-owned utility, deteriorated over the amount of electricity the operations were entitled to receive. Tether understood the arrangement as a minimum supply allocation that could be increased, while UTE treated that figure as a cap.

As power demand rose, the facilities at times lacked sufficient electricity for days. The disagreement had begun by November 2024 and became more severe in 2025 after a new government took office and adopted a tougher position in negotiations.

Bills unpaid, contracts terminated, power cut

Microfin stopped paying electricity bills in May 2025 and informed UTE in June that it intended to terminate the contracts. UTE later approved revised agreements aimed at keeping the project alive, but Tether did not appear for the signing.

UTE disconnected electricity to the mining sites on July 25, 2025. By November 2025, Tether had told labor authorities that it would shut down operations, a move that eliminated 30 of its 38 local jobs. UTE said Microfin paid the outstanding debt in December.

Renewables did not solve the mining economics

Uruguay generated 98% of its electricity from renewable sources in 2025, making it one of the more attractive markets on paper for energy-intensive computing businesses. Even so, Bitcoin mining depends not just on clean electricity but on power that is consistently available and competitively priced.

The Uruguay setback shows that renewable supply alone does not guarantee a workable mining project. For operators planning large-scale deployments, certainty over quantity, cost and contract interpretation can be as important as the source of the electricity itself.

What is confirmed next

The project had effectively ended by the time Tether notified labor authorities in November 2025 that it would cease operations. The confirmed sequence ends with the July power cutoff, the job losses tied to the closure and UTE’s statement that the outstanding debts were settled in December.

No further expansion steps in Uruguay were described in the report, despite the project having been intended as a testing ground for broader South American growth.

Source: news.bitcoin.com