Tether to Cease Bitcoin Mining Operations in Uruguay Due to High Energy Costs

Tether has announced its decision to halt Bitcoin mining operations in Uruguay, primarily due to the country’s high electricity costs. The company has laid off a significant portion of its team and is reassessing its strategy in the region after struggling with energy tariffs since its launch.

Key Takeaways

Tether is ending its Bitcoin mining activities in Uruguay due to unsustainable electricity costs.
The company informed the local Ministry of Labor and has laid off most of its team in the region.
Uruguay's high energy prices have proved to be a critical factor in Tether’s operational challenges.
Despite the setbacks, Tether is pursuing expansion in more favorable locations, including El Salvador and Brazil.

Tether to shut down Bitcoin mining operations in Uruguay over high energy costs.

Tether's Operations in Uruguay Come to an End

Tether has officially announced that it will stop its operations in Uruguay. This confirmation came during a meeting with Uruguay’s Ministry of Labor and Social Security at the National Directorate of Labor's headquarters. In a significant downsizing, Tether has laid off 30 of its 38 team members, retaining only a minimal staff to manage the winding down process.

The primary reason for Tether's withdrawal is the high cost of electricity in Uruguay, which has rendered its energy-intensive Bitcoin mining operations impractical. The tariffs for commercial and industrial users in the country range from $60 to $180 per megawatt-hour based on varying factors such as time and location. Unfortunately, these prices do not provide the competitive edge needed for large-scale mining operations, leading to substantial difficulties for Tether.

When Tether initially announced its intentions to establish operations in Uruguay in 2023, it had projected an investment of up to $500 million aimed at building three data processing centers and a renewable energy park with a capacity of 300 megawatts. Over $100 million had already been invested, with an additional $50 million earmarked for infrastructure intended to be handed to UTE, the state power company.

However, challenges with energy costs surfaced almost immediately. By November 2023, negotiations had begun with UTE to secure more competitive rates. Tether proposed shifting to higher-voltage tariff plans and modifying their energy purchase contracts to alleviate costs, but these suggestions were ultimately declined.

Tether had also communicated a formal warning to UTE, stressing that reliable and competitive tariffs were crucial for the success of such large-scale projects. The company indicated it would reconsider its strategy in Uruguay if no agreement was reached.

Later, in June 2024, Tether's local partner began missing payment deadlines. The following month, UTE suspended power supply to two facilities associated with Tether after the company accumulated a debt of about $5 million. Tether previously denied rumors of withdrawing from Uruguay in September but stated it was still assessing its future plans in the country.

Tether's Ongoing Expansion Plans

Despite the issues in Uruguay, Tether remains focused on global expansion throughout 2025. The company is pursuing acquisitions, forming strategic partnerships, and investing in infrastructure in regions with more favorable conditions for its operations.

Earlier this year, Tether moved its headquarters to El Salvador, attracted by the country's supportive stance towards Bitcoin and its regulations that favor cryptocurrencies. It also entered into a memorandum of understanding with Adecoagro to launch a renewable energy-driven Bitcoin mining project in Brazil.

More recently, Tether expanded its presence in the region by acquiring the digital asset custody platform Parfin, which aims to strengthen its institutional role and connect traditional finance with blockchain technology.