Debt Dispute Exposes Crypto Mining's Vulnerability to Energy Costs in Uruguay

Tether has denied recent reports suggesting its exit from Uruguay following a $4.8 million debt dispute with the state-owned electricity provider UTE. The stablecoin issuer clarified that it is actively engaging with the Uruguayan government and local partner Microfin to resolve the outstanding debt and stabilize operations. The dispute, which led to UTE cutting power to two mining sites in July 2025, has disrupted Tether’s expansion plans in the region, including projects in the Flores and Florida regions Tether Denies Claims it Abandoned Uruguay Crypto Project^[1].

The debt, reportedly around $4.8 million, includes unpaid electricity bills and other local liabilities. UTE confirmed the power shutdown after missed payments and the exhaustion of security deposits, a standard procedure for defaulting customers. A June 2025 Memorandum of Understanding (MoU) between UTE and Microfin—Tether’s local operator—had aimed to resolve the debt through regularized payments and tariff negotiations, but unresolved arrears triggered the July 25 power cutoff Uruguay, UTE pulls the plug on Tether^[2]. Tether acknowledged the debt but emphasized ongoing discussions with authorities to restore operations and avoid long-term disruptions.

Uruguay’s renewable energy infrastructure, which generates approximately 95% of its electricity from wind, solar, hydro, and biomass, had initially made the country an attractive destination for energy-intensive operations like Bitcoin mining. Tether’s 2023 “Tether Energy” project leveraged this to position itself as a sustainable mining operator. However, high electricity costs in Uruguay—ranging from $60 to $180 per megawatt hour (MWh), compared to Paraguay’s $22 MWh—have posed challenges. Analysts note that energy expenses, which account for 80% of mining operations’ costs, are critical to profitability. Tether also operates facilities in Paraguay, where lower costs have made the country a more viable hub Tether’s Uruguay Bitcoin Mining Plans Could Be Over^[3].

The power dispute highlights broader risks for foreign crypto projects in regulated markets. Microfin, the local operator, now faces financial and reputational strain, while Tether’s inability to secure long-term energy contracts underscores the volatility of energy-dependent ventures. Industry experts caution that while renewable energy reduces carbon footprints, it does not mitigate the need for strict financial discipline or contractual guarantees. The incident also raises questions about the governance of foreign investments in critical infrastructure, particularly in regions where public utilities enforce stringent payment protocols Tether’s Bitcoin Mining in Uruguay Faces Power Cut Over Unpaid Bills^[4].

Tether’s denial of an exit contrasts with local media reports citing operational suspensions and stalled expansion. The company has not commented on specific requests for rate reductions or its broader strategy in the region. Meanwhile, its stablecoin adoption continues to grow in Latin America, with recent partnerships in Bolivia and Colombia. The Uruguayan situation, however, underscores the fragility of energy-intensive crypto operations in high-cost markets. For Tether, resolving the debt and restoring power remains crucial to maintaining its global mining ambitions and reputation as a stablecoin leader.