Tether Cuts Staff and Halts Mining in Uruguay Amid Soaring Power Costs

Tether, the issuer of USDT, the world’s largest stablecoin, has officially paused its Bitcoin mining operations in Uruguay, marking a significant reversal for its Latin American expansion strategy. 

The company confirmed the halt on Friday, and said that although operations have been suspended, Tether remains committed to pursuing long-term energy and mining projects across the region.

The statement follows weeks of speculation fueled by local reporting hinting that Tether was preparing to completely exit the country due to ongoing disputes with state-owned utility provider UTE over millions of dollars in unpaid electricity bills. 

While the company had previously denied any intention to leave Uruguay, the company now acknowledges that its mining activity has been fully paused.

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Debt Disputes and Energy Costs Complicate Tether’s Ambitions

The operational shutdown became public after El Observador reported that Tether formally notified Uruguay’s Ministry of Labor about the suspension and the dismissal of 30 employees — a sign that the halt is more than a temporary slowdown.

The decision comes amid continued tensions with UTE, Uruguay’s National Administration of Power Plants and Electric Transmissions. 

In September, local outlet Telemundo reported that Tether had allegedly failed to pay a $2 million electricity bill, as well as an additional $2.8 million related to other local projects. Though the company disputed claims that it would leave Uruguay, it admitted the outstanding debt and said it was working with authorities to “resolve the existing friction.”

Despite Uruguay’s reputation for stable, renewable power, energy prices have risen in recent months due to drought-related constraints and seasonal supply fluctuations — factors that significantly increased the operating costs of Tether’s mining facilities.

Also read: Tether Becomes 17th Largest US Debt Holder With $135 Billion in Treasuries

A Sustainable Mining Vision Meets Local Realities

Tether unveiled its Uruguay mining initiative in May 2023, promoting it as a major step toward building eco-friendly Bitcoin mining capacity powered predominantly by renewable resources. The company partnered with an unnamed licensed local entity and touted the country’s wind, solar, and hydro capabilities as ideal for sustainable mining.

“By harnessing the power of Bitcoin and Uruguay’s renewable energy capabilities, Tether is leading the way in sustainable and responsible Bitcoin mining,” Paolo Ardoino — then CTO and now CEO — said at the time.

However, the project’s execution appears to have been far more complex. While Tether never publicly named its local partners, industry sources have widely linked its operations to UTE and Microfin, a commercial operator involved in renewable-energy-based mining ventures. Neither organization has commented on the pause.

According to El Observador, Tether invested at least $100 million directly into mining infrastructure and an additional $50 million into supporting systems — far below the $500 million regional investment commitment touted last year. Tether declined to confirm these figures, reiterating only that it is evaluating “the best way forward” in Uruguay.

Also read: Tether Hits 500M Users Amid Surge in Stablecoin Adoption

A Broader Regional Strategy Still Intact

Despite the setback, the stablecoin issuer maintains that the pause does not affect its long-term footprint in Latin America. The region has become a key pillar of the company’s broader strategy, including investments in renewable energy, mining partnerships, and financial infrastructure that integrates USDT more deeply into local economies.

“Tether is committed to building long-term initiatives in Latin America, especially projects that harness renewable energy,” the company said. “We continue to evaluate the best way forward in Uruguay and the region more broadly.”