Tether Pushes Back Against Exit Reports
Stablecoin giant Tether has denied claims that it abandoned its $500 million crypto mining project in Uruguay following a reported multimillion-dollar debt dispute. Local media outlets alleged that the company had shut down operations after the country’s state-owned power utility cut off electricity. Tether, however, maintains that it remains committed to the region and is working toward a resolution.
In comments to Cointelegraph, Tether clarified that speculation of a full exit does not “accurately reflect the situation.” Instead, the firm insists its local operator continues engaging with government officials to address the outstanding issues.
Reports Point to $4.8 Million in Liabilities
According to Uruguayan media sources Telemundo and Busqueda, Tether’s local mining partner allegedly accumulated about $4.8 million in unpaid bills. This includes a $2 million electricity charge for May and an additional $2.8 million linked to other facilities. UTE, the state electricity provider, reportedly cut power after the unpaid invoices mounted.
While Tether acknowledged the debt dilemma, it emphasized that negotiations are ongoing. The firm reiterated its support for a constructive solution that aligns with long-term sustainability goals in Uruguay.
Energy Costs a Major Obstacle
High electricity prices remain a core challenge for crypto mining in Uruguay. Power in the country can cost between $60 and $180 per megawatt hour (MWh). By comparison, neighboring Paraguay generates electricity from the Itaipu hydropower plant at roughly $22 per MWh—less than half the lower bound of Uruguay’s rates.
Such disparities make Paraguay a far more attractive hub for energy-intensive industries like crypto mining and artificial intelligence. Tether itself has operations in Paraguay, underscoring the competitive advantage of cheaper power markets.
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Historical Precedent of Crypto Miners Leaving Uruguay
Tether is not the first company to face difficulties with Uruguay’s energy market. In 2018, Vici Mining, a South American Bitcoin mining firm, relocated its facilities to Paraguay to cut costs. At the time, engineers at the company described electricity as “80% of operating expenses,” making cost efficiency vital for survival.
Industry experts argue that the Tether dispute should serve as a warning signal to Uruguay’s policymakers. Without more competitive energy rates, the country risks losing out on opportunities to attract and retain crypto mining investment.
Tether’s Ongoing Negotiations With UTE
Despite the controversy, Tether was reportedly negotiating with UTE for a new mining facility at lower electricity rates. Local media suggested that these talks had stalled due to the dispute, though Tether declined to comment on this specific matter. The company reiterated its long-term outlook, insisting it remains focused on sustainable opportunities in the Latin American region.
Growing Stablecoin Adoption in Latin America
While its mining operations face challenges, Tether’s USDT stablecoin is gaining traction in other parts of Latin America. In Bolivia, major car manufacturers like Toyota, Yamaha, and BYD recently began accepting USDT as payment, helping customers cope with U.S. dollar shortages. Meanwhile, in Colombia, MoneyGram’s crypto payments app now allows users to save in dollar-pegged stablecoins amid ongoing peso weakness.
These developments highlight the dual role Tether plays in the region—balancing its role as a stablecoin issuer with its ambitions in energy-intensive blockchain infrastructure.
Commitment Despite Setbacks
The controversy surrounding Tether’s Uruguay project underscores the tension between high operational costs and long-term investment goals. Although reports painted a picture of an exit, Tether’s denial and continued negotiations suggest the company is not ready to abandon the market.
If Uruguay lowers energy barriers or agrees to favorable terms, the project could still proceed. At the same time, Tether’s expanding stablecoin adoption across Latin America ensures the company remains a central player in the region’s crypto economy.
