Tether Denies Exiting $500M Crypto Mining Project in Uruguay Amid Debt Dispute

Tether is pushing back against local media reports that it is jettisoning its $500 million crypto mining project in Uruguay after the national Adminsitration of Power Plants and Electric Transmission allegedly unplugged power at its facilities for failing to pay a $2 million electricity bill in May.

The local news media outlet also accused the stablecoin company of owing the country more than $2.8 million for all of its local project, bringing its ttal liabilites to roughtly $4.8 million This amount excludes fines and surcharges, according to media outlet Telemundo.

But Tether have denied all the claims, saying that the company is working with local authorities to resolve outstanding issues.

"We continue to evaluate the best way forward in Uruguay and the region more broadly, While reports have speculated an exit from the region, these do not accurately reflect the situation."

The company confirmed the local mining operator is engaged in ongoing discussions with the government to resolve the “outstanding friction” and reiterated its commitment to sustainable investment in Uruguay and the wider region.

"Tether remains supportive of these efforts and of a constructive path forward the reflects our long-term commitment to sustainable opportunities in the region."

Tether first announced plans to begin crypto mining in Uruguay in November 2023, with local media projecting the ventures could reach $500 million in investment.

High Electricity Costs Put Pressure on Crypto Mining

Local reports link the alleged temporary shutdown to Uruguay’s relatively high electricity costs—ranging from $60 to $180 per megawatt-hour (MWh)—which are significantly higher than neighboring Paraguay’s $22 per MWh, a country where Tether also operates Bitcoin mining facilities.

Such energy expenses pose a major challenge in power-hungry industries like crypto mining and AI, where electricity accounts for up to 80% of operational costs.

Tether is not alone in facing challenges in Uruguay’s electricity market. In 2018, South American Bitcoin miner Vici Mining relocated operations to Paraguay, citing more affordable power pricing as a decisive factor.

Vici engineer Nicolás Ribeiro warned policymakers that the Tether dispute should serve as a “warning signal” regarding Uruguay’s ability to attract and retain energy-intensive businesses.

Reports suggest Tether is negotiating with UTE to secure a new facility at reduced electricity rates, though the company declined to comment on the specifics.

In parallel, Tether’s stablecoin adoption is rising across Latin America. In Bolivia, automakers Toyota, Yamaha, and BYD have started accepting USDT payments amid the country’s dwindling US dollar reserves.

Meanwhile, Colombia’s MoneyGram is introducing crypto payment options allowing users to save in dollar-pegged stablecoins as the peso weakens.

Tether’s Uruguay Standoff Is a Cautionary Tale on the Limits of Crypto Ambition

Tether’s stonewalling of exit rumors in Uruguay masks a broader truth: power costs and local regulation remain formidable barriers for crypto miners—even for industry giants. Aspiring crypto hubs like Uruguay must reckon with the real economic terrain, where electricity is king and cheap power wins.

This episode exposes the limits of crypto utopian visions dependent on unchecked expansion. Ambition alone won’t secure success; miners and policymakers alike must face hard truths about sustainability and infrastructure.

As Tether maneuvers to keep its foothold, the message is clear—crypto projects that ignore local market realities risk spectacular failure, no matter their global clout. In the relentless quest for cheap energy, only the nimblest and most pragmatic will survive.