Uruguay's Energy Dispute Pits $500M Tether Mining Venture at Risk

Tether, the issuer of the USDT stablecoin, has denied reports that it is abandoning its $500 million crypto mining project in Uruguay amid a $4.8 million debt dispute with the state-owned electricity provider UTE. Local media outlets, including Telemundo and Búsqueda, claimed that Tether’s mining operations were halted in May 2025 after UTE disconnected power due to an unpaid $2 million electricity bill, with additional liabilities totaling $2.8 million for other projects. However, Tether clarified in a statement to Cointelegraph that it remains committed to the region and is engaged in “ongoing discussions with the government to resolve the outstanding friction.” The company emphasized that it supports a “constructive path forward” aligned with its long-term investment goals in Uruguay and Latin America .

The dispute underscores the challenges Tether faces in Uruguay, where electricity costs are significantly higher than in neighboring countries. Electricity prices in Uruguay range between $60 and $180 per megawatt hour (MWh), compared to as low as $22 MWh in Paraguay, where Tether also operates Bitcoin mining facilities. Industry experts highlight that energy costs account for up to 80% of operational expenses in mining, making affordability a critical factor for long-term viability. This context follows a 2018 precedent when South American miner Vici Mining relocated operations from Uruguay to Paraguay to leverage cheaper energy . Analysts suggest the Tether-UTE dispute could serve as a cautionary tale for policymakers, emphasizing the need for competitive energy pricing to retain energy-intensive industries .

Tether’s local subsidiary, Microfin, reportedly sought discounted electricity rates for new facilities, though negotiations remain undisclosed. The outcome of these discussions will determine whether the company can sustain its $500 million investment in Uruguay. A failure to resolve the debt and secure favorable rates could force Tether to reallocate resources to jurisdictions with lower energy costs, mirroring Vici Mining’s 2018 move. Such a shift would not only impact Uruguay’s economic ambitions but also highlight the fragility of large-scale crypto projects in regions without cost advantages .

The situation also reflects broader tensions in the crypto mining sector, where operational stability hinges on predictable energy supply and pricing. UTE’s decision to cut power following the unpaid bill has raised concerns about the reliability of energy infrastructure for high-consumption industries. Analysts note that without clear contractual frameworks and tariff predictability, even well-funded projects risk operational disruptions. This aligns with broader industry trends, where miners increasingly prioritize locations with cheap, renewable energy to offset rising costs .

Despite the dispute, Tether’s stablecoin adoption continues to expand in Latin America. In Bolivia, automakers like Toyota and Yamaha have started accepting USDT payments, while MoneyGram in Colombia offers USDT-based solutions to mitigate the peso’s volatility. These developments underscore the growing integration of stablecoins into traditional financial systems, even as energy challenges persist for mining operations .

The outcome of Tether’s negotiations in Uruguay will likely influence the region’s attractiveness for future crypto investments. Policymakers face a critical choice: adjust energy policies to remain competitive or risk losing capital-intensive projects to neighbors like Paraguay. For Tether, the resolution of the $4.8 million debt and the establishment of sustainable energy terms will determine whether its Uruguay venture becomes a model for large-scale crypto mining or another example of the sector’s sensitivity to energy economics .