Uruguay’s Tariff Dispute Sparks Tether Shift to Brazil

Tether Holdings Ltd. has denied recent claims that it is halting its $500 million data center and renewable energy project in Uruguay, attributing the delays to unresolved electricity tariff disputes rather than a complete withdrawal. The company, through its affiliate Microfin, had previously invested over $100 million in operational bitcoin mining facilities in the Florida and Tacuarembó departments, with plans to expand to three data centers and a 300 MW renewables park . However, tensions with Uruguay’s state-owned utility UTE escalated in July 2025, when power was cut to two mining sites due to unpaid electricity bills totaling nearly $5 million . Tether has since stated that the project’s suspension is a strategic decision driven by the absence of a "competitive, predictable tariff scheme for projects of its scale" , rather than a direct consequence of the power cutoff.

The dispute highlights the challenges of large-scale energy-intensive operations in regulated markets. Tether had sought volume-based pricing and long-term tariff stability to justify its multi-year infrastructure plans, but negotiations with UTE stalled for nearly two years . Despite a June 2025 memorandum of understanding (MoU) between UTE and Microfin aimed at resolving the debt, the agreement collapsed as payments remained outstanding . Tether emphasized that its exit is not a failure of the project but a recalibration of its regional strategy, with the company now pivoting to Brazil via a partnership with Adecoagro, a firm in which Tether holds a majority stake . The new venture will focus on integrating agriculture, energy, and technology, signaling a shift toward more sustainable and cost-effective mining solutions.

Uruguay’s renewable energy potential—95% of its electricity generation comes from non-fossil sources—had initially made it an attractive destination for crypto mining . However, the Tether saga underscores the fragility of such investments without clear regulatory frameworks and competitive pricing. The project’s cancellation not only derailed Uruguay’s ambitions to become a regional hub for data infrastructure but also raised questions about the country’s ability to attract and retain energy-intensive industries. Analysts note that while Uruguay’s green energy profile reduces cost volatility, it does not mitigate risks tied to contractual disputes, payment defaults, and the lack of market-based mechanisms for large-scale energy consumers .

Tether’s phased reduction of operations in Uruguay is expected to conclude by year-end, with no further capital commitments in the country . The company has also clarified that it remains engaged in discussions with Uruguayan authorities, though it will not pursue the original project under current conditions . This development aligns with broader regulatory shifts in the U.S., where the Trump administration’s pro-crypto policies, including the recent executive order expanding access to digital assets in 401(k) plans, have signaled a more favorable environment for crypto adoption Tether to Leave Uruguay Over Power Costs and Tariff Impasse^[4]. However, for countries like Uruguay, the Tether case serves as a cautionary tale about the need for predictable energy pricing and regulatory clarity to support high-stakes digital infrastructure projects.