Tether's Bitcoin Mining Project in Uruguay Suspended Due to Power Dispute
Tether's Bitcoin mining project in Uruguay, which involved an investment of approximately $120 million, has been suspended due to a dispute over the power supply contract with the state-owned power company UTE.
The two parties disagreed on the contracted power supply amount, with Tether viewing it as a minimum guaranteed supply, while UTE considered it a maximum supply limit. After a new agreement was not signed and power bills went unpaid, UTE cut off electricity to two mining sites on July 25, 2025.
Tether subsequently ended its local operations and laid off most employees, while the local entity Microfin later settled the outstanding debts.
This project was seen by Tether as the first step into Bitcoin mining in South America, with the two mining sites located in the province of Florida.
Tether continues to expand its regional presence, having previously acquired about 70% of renewable energy company Adecoagro and plans to utilize its remaining electricity for Bitcoin mining.
Funding is shifting from high-dependency projects in a single country to owned or controlled energy assets, with the stablecoin issuer accelerating vertical integration of power and mining segments. The exit from the Uruguay project reduces the pace of short-term hash rate expansion, leading to event-driven resource reallocation, with other renewable energy mining sites in South America benefiting relatively.
Source: Public Information
ABAB AI Insight
Since announcing its mining plan in Uruguay in 2023, Tether attempted to leverage local renewable energy advantages for rapid deployment, similar to early mining companies chasing low electricity price policies in China and North America. However, it ultimately failed due to contractual terms and the rigidity of government transitions.
Acquiring a controlling stake in Adecoagro and directing remaining electricity towards mining is motivated by a shift from reliance on external power supply contracts to controlling energy production, strategically reducing policy and contract risks while reinvesting stablecoin profits into physical energy assets.
This is similar to large mining companies like Marathon Digital and Riot Platforms achieving vertical integration through self-built or acquired power assets. Currently, Tether is transitioning from outsourced power supply to energy self-sufficiency.
Essentially, this represents a restructuring of the industry chain. The stablecoin giant is converting profits into upstream energy control, using capital to bypass the bottlenecks of a single country's power grid, upgrading mining from a "renting power" model to a "producing power + mining" closed loop.
ABAB News · Cognitive Laws
- Contractual ambiguities are the largest hidden costs in cross-border projects.
- Controlling energy is more sustainable than chasing low electricity prices.
- Policy transitions often reprice existing commitments.