Stablecoin giant Tether has halted its massive $500 million crypto mining operation in Uruguay, citing high energy costs and lack of tariff frameworks.
The company has laid off 30 of its 38 staff in Uruguay, local media outlet El Observador reported. Tether Holdings confirmed the termination to the authorities of the Ministry of Labor and Social Security (MTSS), following a Tuesday meeting at the headquarters of the National Directorate of Labor (Dinatra).
In May 2023, Tether launched sustainable Bitcoin mining operations in Uruguay, in collaboration with a local licensed company. The company CEO, Paolo Ardoino, said that the South American nation “has a robust and reliable electrical grid capable of meeting the demands of modern industries.”
Following its debut, Tether projected investments of $500 million. This includes the construction of three Data Processing Centers in the departments of Florida and Tacuarembó provinces.
Besides, it also planned to construct a wind and solar power park with an installed capacity of 300 megawatts.
However, Tether spent only $100 million and had earmarked an additional $50 million for infrastructure building. These facilities would become the property of the UTE and the National Interconnected System.
Tether Multi-Million Dollar Debut Led to Power Service Cut Off
The news of Tether’s cessation of operations in Uruguay stemmed in September, after the national electricity provider (UTE) halted supply in late July over unpaid bills totaling nearly $5 million.
Even so, “it didn’t have the money to pay UTE $5 million in arrears,” one user wrote on X, criticizing Tether’s Uruguay backtrack.
The crypto giant negotiated through its local subsidiary Microfin to secure long-term electricity deals. However, the failure to settle debts triggered the shutdown.
“We believe in the country’s potential, but for projects of this scale, a competitive and predictable tariff framework is essential. The failure to reach an agreement forces us to rethink our strategy,” Tether told UTE in a letter in September.
USDT Provider Pledges Millions in South American Mining Projects
The USDT stablecoin provider announced broader plans to control about 1% of the global Bitcoin network. In July, the crypto powerhouse partnered with a South sustainable production firm to explore a strategic collaboration focused on BTC mining.
Though the recent setback in Uruguay raises questions about the viability of energy-intensive mining in high-cost markets, Paraguay and Texas have attracted miners with cheaper electricity.
Tether previously announced plans to establish Bitcoin mining facilities in Paraguay and El Salvador, with each site having a capacity ranging between 40 and 70 megawatts.
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