Tether Halts Bitcoin Mining Operations in Uruguay Amid Rising Energy Costs

Tether, the issuer of USDT, the largest stablecoin globally, has ceased its Bitcoin mining in Uruguay due to escalating energy prices.

Key Takeaways

Tether has suspended its Bitcoin mining activities in Uruguay due to increased energy costs.
The company has officially notified local authorities of the operation's halt and the dismissal of 30 employees.
Tether's initial investment in Uruguay was aimed at sustainable Bitcoin mining, but financial disputes have led to the exit.
Despite the challenges, Tether reaffirms its commitment to long-term projects in Latin America focused on renewable energy.

Tether confirms Uruguay Bitcoin mining exit amid high energy prices

“We can confirm that we have paused operations in Uruguay,” a spokesperson from Tether informed Cointelegraph on Friday. The company emphasized its ongoing commitment to long-term projects in Latin America.

This announcement follows Tether's earlier denial of plans to withdraw from Uruguay, which came after a $4.8 million debt dispute with a state-owned electricity provider in September. As reported by local news agency El Observador on Tuesday, Tether has officially informed Uruguay's Ministry of Labor about the suspension of its mining activities and the laying off of 30 staff members.

What Led to Tether's Exit from Uruguay?

Tether initially announced its entry into “sustainable Bitcoin mining” in Uruguay in May 2023, collaborating with a yet-to-be-identified local licensed firm. “By leveraging the potential of Bitcoin and Uruguay’s renewable energy resources, Tether is pioneering sustainable and responsible Bitcoin mining,” said Paolo Ardoino, who is now Tether’s CEO and was previously the chief technology officer. He underscored the company’s dedication to eco-friendly cryptocurrency operations.

While Tether has not disclosed its local partners, industry sources have suggested connections between Tether's mining activities in Uruguay and the National Administration of Power Plants and Electric Transmissions (UTE), along with the local commercial entity Microfin.

In September, local outlet Telemundo revealed that Tether was retracting its planned $500 million investment in Uruguayan mining initiatives after reportedly failing to pay a $2 million electricity bill to UTE, as well as an additional $2.8 million owed for other local projects. Tether responded to these reports by denying any intentions to leave the country while acknowledging the debt, asserting that it was actively working with the government to “resolve the ongoing issues.”

From the anticipated $500 million investment, Tether is believed to have invested over $100 million in mining operations and an additional $50 million in infrastructure, as reported by El Observador. Tether did not confirm these figures when contacted by Cointelegraph, stating, “Tether is dedicated to fostering long-term projects in Latin America, particularly those utilizing renewable energy. We are continually assessing the best path forward in Uruguay and the wider region.”