Uruguay's Energy Conflict Threatens $500 Million Tether Mining Project

Tether, the company behind the

stablecoin, has refuted claims that it is pulling out of its $500 million cryptocurrency mining initiative in Uruguay, despite a reported $4.8 million debt dispute with the state-run utility UTE. According to local news sources such as Telemundo and Búsqueda, Tether’s mining activities were allegedly suspended in May 2025 after UTE cut off electricity due to an outstanding $2 million bill, with an additional $2.8 million owed for other ventures. Nevertheless, stated to Cointelegraph that it is still dedicated to operating in the area and is “actively negotiating with government officials to address the current disagreements.” The company stressed its intention to pursue a “positive resolution” that fits its broader investment plans for Uruguay and the Latin American region.

This conflict highlights the difficulties Tether encounters in Uruguay, where power costs are much steeper than in nearby nations. Electricity in Uruguay is priced between $60 and $180 per megawatt hour (MWh), while in Paraguay—where Tether also runs

mining operations—rates can be as low as $22 per MWh. Experts in the field note that energy expenses can make up as much as 80% of mining costs, making affordable electricity crucial for sustainability. This situation recalls a 2018 case when Vici Mining, a South American operator, moved its business from Uruguay to Paraguay to benefit from lower energy prices. Observers believe the Tether-UTE standoff could serve as a warning to lawmakers about the importance of competitive energy rates for retaining power-hungry industries.

Reports indicate that Tether’s Uruguayan arm, Microfin, has been negotiating for reduced electricity prices for new sites, but the details remain confidential. The results of these talks will be key in determining whether Tether can maintain its $500 million investment in the country. If the company cannot resolve its debts and secure better rates, it may be compelled to shift its operations to regions with cheaper power, following the example set by Vici Mining in 2018. Such a move could not only undermine Uruguay’s economic goals but also expose the vulnerability of major crypto projects in areas lacking cost advantages.

This scenario also mirrors broader issues in the crypto mining industry, where reliable and affordable energy is essential for stable operations. UTE’s action to disconnect power over unpaid bills has sparked concerns about the dependability of energy supplies for large-scale consumers. Industry analysts point out that without stable contracts and predictable tariffs, even well-capitalized ventures could face interruptions. This reflects a wider trend in the sector, with miners increasingly seeking locations that offer inexpensive, renewable energy to counteract rising costs.

Despite these challenges, Tether’s stablecoin continues to gain traction across Latin America. In Bolivia, car manufacturers such as Toyota and Yamaha now accept USDT payments, and in Colombia, MoneyGram provides USDT-based services to help manage peso volatility. These examples illustrate the deepening role of stablecoins in mainstream finance, even as mining operations grapple with energy-related obstacles.

The resolution of Tether’s negotiations in Uruguay is expected to shape the region’s appeal for future crypto investments. Lawmakers must decide whether to reform energy policies to stay competitive or risk seeing capital-intensive projects relocate to countries like Paraguay. For Tether, settling the $4.8 million debt and securing sustainable energy agreements will be decisive in determining whether its Uruguayan project becomes a benchmark for large-scale crypto mining or another instance of the industry’s sensitivity to energy costs.