Tether’s failed Bitcoin mining project in Uruguay offers a useful lesson for an industry built around one simple equation: turn cheap, reliable electricity into Bitcoin.
In 2023, Tether chose Uruguay as its first major South American mining venture, describing the country as a ‘perfect platform’ because of its abundant renewable energy, reliable grid, and political stability. It established two sites in the rural Florida department with a former contractor estimating that the company spent about $120 million, or roughly $60 million per site.
The project was intended to serve as a launchpad for expansion into Brazil, Paraguay and Argentina.
But the project ran into a problem that having renewable energy could not solve: what electricity could Tether actually count on getting?
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At the centre of the dispute was Tether’s contract with Uruguay’s state-owned utility, UTE. Tether understood the agreed power allocation as a minimum that could be increased as the mining sites expanded. UTE interpreted it as a maximum. As electricity demand grew, the facilities were sometimes left without enough power for days at a time.
By late 2024, the disagreement was already developing into a serious operational problem.
Attempts to renegotiate the arrangement failed. In 2025, Tether’s local entity, Microfin, stopped paying its electricity bills and notified UTE that it intended to terminate the contracts. UTE eventually cut power to the sites on July 25 2025. Tether later told labour authorities it would cease operations and lay off most of its local staff.
That matters because Bitcoin mining does not simply need renewable electricity. It needs predictable electricity at a price that allows machines to run continuously.
Uruguay has one of the world’s strongest renewable-energy profiles, but that does not automatically make it a low-cost Bitcoin mining destination. Analysts cited by Reuters said the country’s relatively high electricity costs make it less attractive for an activity whose economics are heavily dependent on cheap power. The country’s reliable grid and connectivity may instead be more valuable for data centres and AI computing where the economics can support higher power costs.
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The timing also made the problem worse. Bitcoin mining economics have become tougher since the April 2024 halving reduced the block reward while changes in Bitcoin’s price and rising operating costs have increased pressure on miners to secure cheaper and more efficient power.
The Uruguay case therefore highlights a distinction that is easy to miss in discussions about sustainable Bitcoin mining:
Renewable energy is a source of power. It is not, by itself, a viable mining business model.
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Miners need
clear contractual rights to power,
dependable capacity,
competitive tariffs,
predictable scaling, and
economics that remain viable when Bitcoin prices or mining rewards change.
Tether’s experience shows that a country can have abundant clean energy and still be a difficult place to mine Bitcoin.
For miners, the real question isn’t “Is the electricity renewable?” It is “Can I secure enough of it, at a predictable price, under terms that allow me to stay profitable?”
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