MONTEVIDEO/PARIS — Uruguay seemed like the perfect place for cryptocurrency giant Tether to launch a bitcoin mining operation. The company, which has issued nearly two thirds of all stablecoins in circulation, picked this still largely agricultural corner of South America that has in recent years become a hub for global fintech firms, helped by its reputation for political stability and favorable tax conditions. In 2023, Tether said it would build two mining sites in Uruguay, part of a spending spree it said would bring economic development, new energy infrastructure and jobs to the country. But amid a dispute over the amount of energy that would be supplied for its thirsty bitcoin mining, the plans unraveled and the mining sites were abandoned, a Reuters review of documents and interviews with multiple people reveals. Little was left to show for a project that one person with direct knowledge estimated likely cost around US$120 million. Tether did not respond to requests for comment for this article. The aborted Uruguay investment offers a rare window into the often opaque operations of Tether, as it seeks to expand and reinvest its vast profits into industries as varied as brain implants and soccer. It also demonstrates how the basic economics of bitcoin mining — turning cheap energy into crypto profits — may no longer be adding up, after crypto prices dropped and as energy prices rise. Tether’s ability to quickly dip in and out of Uruguay is typical of the “hypermobile” nature of bitcoin mining activity, which does not tend to create substantial long-term jobs or benefits for the host country, said Pete Howson, an assistant professor at Northumbria University. “This plug-and-play infrastructure is very easy to do — literally pulling the plug and then move it to somewhere else,” he said. ‘The perfect platform’ In May 2023, Tether announced the launch of bitcoin mining operations in Uruguay, without disclosing an investment value. It called Uruguay the “perfect platform,” citing its abundant renewable energy and robust grid. Tether CEO Paolo Ardoino and chairman Giancarlo Devasini are frequent visitors to Uruguay’s booming beach resort of Punta del Este — dubbed the Monaco of South America — where they host private gatherings, industry sources told Reuters, and American billionaire Peter Thiel is building a US$10 million residential compound nearby. At the time, Tether said the plan involved “investing resources into energy production,” without providing details. Bitcoin mining, an energy-intensive process in which computers solve complex computational puzzles to be rewarded in bitcoin, is a core part of Tether’s investment plans. Ardoino told an industry conference last year the company has invested more than US$2 billion in energy production and bitcoin mining. A former Tether contractor who spoke to Reuters on condition of anonymity because they are not allowed to speak to the media said Uruguay had been intended as a “first step” for Tether’s bitcoin mining plans across South America. Tether invested roughly US$60 million in each of two mining sites in the department of Florida, totaling roughly US$120 million, the former contractor said, citing their own assessments of how much the company had spent. The project, a sizable deal for a country where annual foreign direct investment is around US$2 billion, was aimed at using Uruguay as a testing ground before moving to bigger markets such as Brazil, Paraguay and Argentina, the person said. Tether has since announced investments in bitcoin mining and platforms in Brazil. Based in El Salvador with just a few hundred employees globally, Tether controls around US$183 billion-worth of stablecoin. Some policymakers worry that stablecoins, a type of cryptocurrency pegged to official currencies, risk endangering financial stability by increasing the linkages between crypto and mainstream finance. Tether says its stablecoin is backed by an equivalent amount in real-world assets. Those assets have made it a top 20 holder of U.S. Treasuries — earning the company billions in profits now used to build a portfolio of investments it says is worth around US$20 billion. Most of those 100-plus investments are not disclosed, but those it has include data centers, video-sharing platform Rumble, which hosts U.S. President Donald Trump’s Truth Social, and a brain-chip implants business, plus a stake in Italy’s Juventus football club. Supply disagreement A promotional video posted by Tether on X in February 2024 of its nascent Uruguay operations showed rows of small buildings, with fans on top and computing hardware inside. Farmland surrounds the site, characteristic of the rural department of Florida, with wind turbines in the background. Road signs around the buildings play on crypto jargon, such as “Memepool Avenue” and “Halving Street”, according to the video, which was verified by Reuters. Initially well run, the site’s operations generated income, the two former Tether contractors said. Then the project began to unravel over a fundamental disagreement about electricity supply with state utility UTE, the two former contractors and a source at UTE said. Tether believed a clause in its contract with UTE represented a minimum level of power supply that could later be increased — but UTE viewed the contracted amount as a maximum allocation that could not be exceeded, one of the former contractors said. Sources at UTE also said the disagreement was over how much electricity Tether’s local legal entity Microfin was entitled to. The dispute had begun by November 2024, according to an internal briefing UTE compiled in 2025 for its own staff that Reuters reviewed. Insufficient power was a serious problem. As demand at the mining plants rose, Tether was short of supply, leaving the site without sufficient electricity for days at a time, the former contractor said. Tether and Microfin did not respond to requests for comment on the UTE contract. The first ex-contractor and a third source said the dispute had been compounded by a shift in Uruguay’s political landscape. A left‑leaning government took office in March 2025 and appointed new directors at UTE. The firm took a harder line on allowing Tether to renegotiate the energy supply contract, the contractor said. Two months after the new government took office, Microfin stopped paying its electricity bills and then told UTE in June 2025 it would terminate its contracts, the UTE document shows. Both sides sought to salvage the deal by agreeing to a revised contract, the UTE briefing notes show. The utility’s board approved a memorandum of understanding and revised contract texts, but Tether representatives did not attend the signing, according to the minutes in the briefing. With the memorandum unsigned and unpaid bills, UTE cut power to the mining sites on July 25, according to the UTE document. Tether told Uruguay’s labor authorities on November 25 that it would cease operations and lay off most staff, local newspaper El Observador reported. Microfin settled its outstanding debts in December, UTE told Reuters. Switch to AI The Uruguayan deal collapsed as Tether has sought to position bitcoin mining as a key part of its global investment portfolio. But bitcoin mining has become less profitable, analysts say, hit by a pre-programmed reduction in the bitcoin rewards available — called the “halving” — in April 2024, as well as a sharp drop in bitcoin’s price from a peak in 2025. To stay afloat, bitcoin miners have tried strategies including buying more efficient hardware, seeking cheaper energy, or using their computer power for AI and high-performance computing instead, said Tanay Ved, senior research analyst at Talos. Crypto mining expert Nicolas Ribeiro described the industry as “extremely dynamic,” with operators opening, closing and relocating constantly. Uruguay’s strengths — a reliable power grid and strong internet connectivity — are better suited to data centers for AI because mining hinges almost entirely on access to cheap electricity, Ribeiro added. Uruguay is a leader in renewable energy, but its power costs are relatively high. “Uruguay isn’t viable for mining — that’s the reality,” he said. --- Reporting by Lucinda Elliott and Elizabeth Howcroft, additional reporting by Maria Paula Laguna. Editing by Tommy Reggiori Wilkes, Elisa Martinuzzi and Rosalba O’Brien
