Tether Refutes Rumors of Abandoning Mining Operations in Uruguay

Tether Confirms Continued Presence in Uruguay Despite Energy Dispute

Tether, the issuer of the world's largest stablecoin USDT, has officially denied rumors suggesting it plans to exit Uruguay due to an ongoing dispute over an alleged $4.8 million debt with a public utility company. The company clarified its position following reports from local media that claimed Tether was abandoning its cryptocurrency mining operations in the country.

The controversy began when Uruguay's National Administration of Power Plants and Electrical Transmissions (UTE) reportedly cut power to Tether's mining facilities due to an unpaid $2 million electricity bill for May operations. However, Tether has firmly pushed back against these claims.

Tether's Official Response

In a statement addressing the situation, a Tether spokesperson emphasized the company's continued commitment to the region:

"We continue to evaluate the best path forward in Uruguay and the broader region. While rumors have suggested an exit from the region, they do not accurately reflect the situation. We are engaged in ongoing discussions with the government to resolve existing frictions, and Tether continues to support these efforts along with a constructive path that reflects our long-term commitment to sustainable opportunities in the region."

Investment Plans and Energy Challenges

Tether initially announced plans to venture into cryptocurrency mining in Uruguay in November 2023, with a potential investment of $500 million. However, the high cost of electricity in the country has presented significant challenges to the profitability of mining operations.

Electricity prices in Uruguay range between $60 and $180 per megawatt-hour (MWh), significantly higher than neighboring Paraguay, where Tether also operates mining facilities and pays approximately $22 per MWh. This stark contrast in energy costs has created operational challenges for Tether's Uruguayan venture.

Regional Context and Industry Precedent

This isn't the first time energy costs have influenced cryptocurrency mining operations in the region. In 2018, South American Bitcoin mining company Vici Mining relocated from Uruguay to Paraguay specifically to benefit from lower energy costs.

"Looking at the global average price of electricity, Uruguay is well above," said Nicolás Ribeiro, an engineer at Vici. "Although establishing operations in a new country is always challenging, when you realize that 80% of your operating costs are related to electricity, it becomes a very significant factor in deciding where to establish your operations."

Negotiations and Future Prospects

According to reports, the dispute between Tether and UTE may be related to electricity pricing. Tether has reportedly been negotiating with UTE for reduced rates for a new facility. The outcome of these negotiations could significantly impact Tether's future operations in Uruguay.

Despite these challenges, Tether appears committed to maintaining its presence in Uruguay and Latin America more broadly, where cryptocurrency adoption continues to grow. The company recognizes the strategic importance of the region, particularly as stablecoins like USDT gain traction for international transfers and everyday transactions.

Broader Adoption in Latin America

While Tether navigates its operational challenges in Uruguay, broader adoption of cryptocurrencies, especially stablecoins, continues to accelerate across Latin America. Recently, three major automotive manufacturers—Toyota, Yamaha, and BYD—announced they would accept USDT as a payment method in Bolivia, highlighting the growing integration of stablecoins into everyday commercial activities.

This regional trend underscores why Tether likely remains committed to maintaining its presence in Uruguay despite the current energy dispute. As stablecoins become increasingly embedded in Latin American economies, Tether's strategic positioning in the region could prove valuable in the long term.

The company has indicated it will continue working with Uruguayan authorities to resolve the current situation while exploring sustainable operational models that can accommodate the region's energy pricing structure.