Tether’s $120M Bitcoin Mining Push Hits a Power Roadblock

• Tether’s two Uruguay mining sites cost an estimated $120 million.
• A dispute with state utility UTE centered on how much electricity the sites could draw.
• UTE disconnected both facilities in July 2025 after bills went unpaid.
• Tether has continued pursuing Bitcoin mining elsewhere in South America.

Tether’s attempt to establish Uruguay as a launchpad for a larger South American Bitcoin mining business ended with two abandoned facilities after a contractual dispute with state-owned electricity provider UTE. The sites, estimated by a person with direct knowledge to have cost about $120 million, lost power in July 2025, according to documents and interviews reviewed by Reuters, turning what began as a renewable-energy mining expansion into a costly example of how electricity contracts can determine the economics of industrial-scale Bitcoin production.

A Power Contract Became the Project’s Central Problem

When Tether announced its Uruguay expansion in 2023, the country appeared well suited to the company’s mining ambitions. Uruguay offered political stability, a reliable electrical grid and a power system with substantial renewable generation.

The two facilities were built in the department of Florida, with a former contractor estimating investment of roughly $60 million in each site. Uruguay was intended to serve as a testing ground before Tether expanded further into countries including Brazil, Paraguay and Argentina.

Operations initially generated revenue, according to former contractors interviewed by Reuters. The problem emerged as electricity requirements increased.

Tether and UTE interpreted a critical part of their electricity agreement differently. Tether understood the contracted power figure as a minimum allocation that could eventually be expanded. UTE regarded it as the maximum amount of electricity available to Tether’s local entity, Microfin.

That distinction became increasingly important as the mines scaled. Bitcoin mining facilities need a large and predictable electricity supply because their economics depend heavily on keeping specialized machines operating continuously. According to Reuters, insufficient supply sometimes left the sites without enough electricity for days.

Key stages in the Uruguay project

Why Negotiations Failed Despite a Revised Electricity Deal

The disagreement did not immediately end the project. UTE and Tether attempted to renegotiate the arrangement, and the utility’s board approved both a memorandum of understanding and revised contract documents.

The agreement was never completed.

According to minutes cited by Reuters, Tether representatives did not attend the planned signing. By that stage, Microfin had already stopped paying electricity bills and had informed UTE in June that it intended to terminate the contracts.

With the revised agreement unsigned and bills outstanding, UTE cut electricity to the facilities on July 25, 2025. Microfin subsequently settled its outstanding debt in December, UTE told Reuters.

The chronology matters because the shutdown was not simply the result of Uruguay lacking enough renewable electricity. The underlying problem was whether Tether could secure sufficient power under terms that made expanding its mining operation commercially workable.

Uruguay Exposed the Economics Behind Tether’s Mining Strategy

Bitcoin miners effectively convert electricity and computing capacity into BTC. That makes the cost and reliability of power fundamental to profitability.

The April 2024 Bitcoin halving made that calculation harder by reducing the block subsidy from 6.25 BTC to 3.125 BTC. Unless higher Bitcoin prices, transaction fees or improved mining efficiency compensate for the reduction, miners earn fewer coins from the same amount of computational work.

Uruguay offered extensive renewable generation, but renewable electricity is not automatically cheap electricity.

Crypto mining specialist Nicolas Ribeiro told Reuters that Uruguay’s relatively high power costs make the country less competitive for Bitcoin mining, while its stable grid and internet infrastructure may be better suited to AI data centers. Mining operators have fewer reasons to remain in a particular jurisdiction when electricity becomes uneconomical because much of their computing hardware can be relocated.

That flexibility helps explain why the collapse of the Uruguay project has not ended Tether’s broader energy strategy.

Tether Has Already Shifted Mining Investment Elsewhere

The failed project also needs to be viewed against the scale of Tether’s wider expansion.

CEO Paolo Ardoino said in June 2025 that Tether had invested more than $2 billion in energy and mining infrastructure across 15 sites in Uruguay, Paraguay and El Salvador, according to The Block. The company has pursued mining infrastructure as one component of a much broader investment portfolio.
Brazil has become one of the next areas of focus.

In July 2025, Tether and agricultural and renewable-energy producer Adecoagro signed a memorandum of understanding to explore using renewable electricity for Bitcoin mining. The proposed model centers on monetizing surplus electricity from Adecoagro’s renewable-energy portfolio rather than reproducing the same arrangement used in Uruguay.

Tether had previously acquired a controlling stake in Adecoagro, giving it a more direct connection to the underlying energy assets.

The distinction could prove significant. Greater control over energy generation may reduce some of the contractual dependency that affected the Uruguay sites, although it does not eliminate mining’s exposure to

Bitcoin prices, network difficulty, equipment efficiency and local electricity economics.

What Changes Next for Tether’s Bitcoin Mining Plans

The Uruguay exit leaves Tether with a more fragmented South American mining strategy than originally envisioned. Instead of using one country as a regional testing ground and then replicating the model, the company is pursuing different energy arrangements across individual markets.

For the mining industry, the episode reinforces why headline renewable-energy capacity is not enough when evaluating potential jurisdictions. Large operators need contractual certainty over both electricity prices and how much power they can consume as facilities expand.

Tether’s next South American projects will therefore provide a clearer test of whether greater involvement in energy production can improve those economics. Its partnership with Adecoagro is particularly relevant because the companies plan to examine whether surplus renewable electricity can be converted into Bitcoin mining revenue, giving Tether a different operational model from the one that failed in Uruguay.

Source: https://www.crypto-news-flash.com/tethers-120m-bitcoin-mining-push-hits-a-power-roadblock/