How Tether's bitcoin mining plans in Uruguay unraveled

In August 2023, cryptocurrency giant Tether planned to launch bitcoin mining operations in Uruguay, a South American country known for its political stability and favorable tax conditions. Tether, which issues a significant portion of stablecoins in circulation, announced it would build two mining sites in the agricultural region of Uruguay. The company claimed the investment would bring economic development, new energy infrastructure, and jobs to the country, with an estimated cost of around $120 million.

However, the plans were abandoned due to a dispute over the amount of energy Tether would consume for its bitcoin mining activities. According to a Reuters review of documents and interviews with multiple people, Tether and Uruguay's state utility company, UTE, disagreed on the extent of electricity supply. Tether argued that a clause in its contract with UTE represented a minimum power supply that could be increased later, while UTE believed it was a maximum allocation.

In May 2023, Tether released a promotional video showcasing the nascent Uruguay mining operations, which featured small buildings with computing hardware inside and farmland surrounding the site. The project, a significant investment for Uruguay, was intended as a testing ground before expanding to other South American markets like Brazil, Paraguay, and Argentina.