Montevideo – Stablecoin issuer Tether has denied reports that it has abandoned its $500 million crypto mining project in Uruguay, pushing back against claims from local media that the company pulled out over unpaid electricity bills.
Tether Responds to Allegations
According to local outlets, Tether’s mining operations were disconnected by Uruguay’s National Administration of Power Plants and Electric Transmissions (UTE) after the operator allegedly failed to pay a $2 million electricity bill for May. Additional liabilities from other projects were reported at $2.8 million, raising the total to $4.8 million, excluding fines.
However, Tether disputed the exit narrative, clarifying that discussions are ongoing.
“We continue to evaluate the best way forward in Uruguay and the region more broadly. While reports have speculated an exit from the region, these do not accurately reflect the situation,” the company said in a statement.
Tether added that its local mining partner is in talks with the government to resolve outstanding issues, stressing its “long-term commitment to sustainable opportunities in the region.”
High Energy Costs Pose Challenge
The dispute highlights a broader challenge for crypto miners in Uruguay: electricity costs are among the highest in Latin America. Rates range between $60 and $180 per megawatt hour (MWh), compared to just $22 MWh in neighboring Paraguay, where hydropower from Itaipu provides abundant, cheap energy.
In fact, Vici Mining, a South American Bitcoin miner, left Uruguay in 2018 for Paraguay due to the same cost pressures.
“When 80% of your operating costs are electricity, it becomes a decisive factor in where you operate,” said Vici Mining engineer Nicolás Ribeiro, warning that the Tether dispute should serve as a “signal” to policymakers about retaining energy-intensive industries.
Regional Impact and Stablecoin Adoption
Tether’s ambitions in Uruguay, first announced in November 2023, were expected to bring up to $500 million in investment. While the project’s future remains uncertain, Tether continues to expand elsewhere, including Bitcoin mining in Paraguay, where costs are significantly lower.
Meanwhile, stablecoin adoption is growing rapidly across Latin America. Automakers such as Toyota, Yamaha, and BYD have started accepting USDT payments in Bolivia, while MoneyGram launched a crypto payments app in Colombia, offering citizens a way to hold dollar-based stablecoins amid weakening local currencies.
While Tether insists it has not abandoned Uruguay, the situation underscores the fragile balance between energy costs, policy, and investment decisions in the crypto mining industry. A resolution with UTE could determine whether Uruguay becomes a long-term hub for Tether’s mining ambitions—or a cautionary tale for others eyeing the market.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.