Tether’s Bitcoin Mining Expansion in Uruguay Faces Significant Hurdles
In a developing situation, Tether’s ambitious foray into Bitcoin mining within Uruguay has hit a major obstacle. The state-owned electricity provider, UTE, has halted power services to Tether’s two mining operations due to unpaid electricity bills amounting to approximately $5 million. This interruption, confirmed on July 25, 2025, comes just two years after Tether launched its Bitcoin mining endeavors in the country, attracted by Uruguay’s abundant renewable energy sources.
Tether’s Operational Challenges Amidst Escalating Energy Costs
As reported by the local media outlet Busqueda, Tether’s financial issues began surfacing in May 2025 when they defaulted on payments. By June, Andrea Cabrera, the president of UTE, engaged in negotiations with Microfin, the local affiliate involved in the mining project, via a Memorandum of Understanding (MoU). Despite attempts to settle the arrears, the outstanding debt continued to grow, prompting UTE to enforce standard procedures by utilizing security deposits and eventually suspending power on July 25 at the mining sites located in Flores and Florida.
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The suspension of electricity has immediate operational consequences, impacting the performance of computing nodes and reducing hash rate output. This hampers the broader expansion goals Tether had set. Additionally, restarting these sites will entail further expenses, including renegotiating contracts and reinstating technical capabilities. These processes can extend over weeks, contingent upon the guarantees provided and adherence to regulatory protocols.
Tether’s entry into the Uruguayan market in 2023 was driven by the country’s robust renewable energy sector, aligning with their “Tether Energy” initiative. Uruguay’s electricity generation profile, with approximately 95% derived from renewable sources, positioned it as an ideal location for low-carbon industrial operations. The project was part of Tether’s strategy to diversify its business model beyond stablecoin issuance, with a goal to eventually capture 1% of Bitcoin’s global hash rate.
Paolo Ardoino, Tether’s CTO, expressed in 2023 that, “By leveraging Bitcoin and Uruguay’s renewable energy potential, Tether is pioneering sustainable and responsible Bitcoin mining. Our steadfast commitment to renewable energy ensures that every Bitcoin we mine minimizes ecological impact while maintaining the security and integrity of the Bitcoin network. Tether is proud to lead a movement that integrates cutting-edge technology, sustainable practices, and financial innovation.”
Following the recent disclosures by Uruguayan media, both Tether and Microfin have yet to release an official statement regarding the situation.
USDT Achieves Milestone Market Cap of $171.5 Billion
In contrast to the challenges faced in Uruguay, Tether’s stablecoin, USDT, has reached a new market cap milestone of $171.5 billion, solidifying its position as a dominant force in the cryptocurrency market. Currently, USDT represents 58.9% of the stablecoin market and maintains its status as the fourth-largest cryptocurrency globally.
Featured image from Flickr, chart from Tradingview
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