Author: Computing Power Insights
July 25, 2025 - An engineer from Uruguay's National Electricity Company (UTE) pulled the switch.
In an instant, the Bitcoin mining facility that had operated for two years in the rural area of Florida Province fell silent. This mining farm, with an investment of approximately $120 million, came to a halt, resulting in 30 out of 38 local employees losing their jobs.
A once-promising green energy benchmark project in South America ended in disappointment, leaving behind an unsigned new contract and nearly $5 million in unpaid bills.
I. Heading to South America with $120 Million
Tether's move to build a mining farm in Uruguay initially seemed like a win-win strategy.
In May 2023, Tether, the world's largest stablecoin issuer, announced its high-profile entry into Uruguay.
The rationale was compelling: Uruguay boasts a 98% renewable energy power mix, primarily from hydropower and wind, offering not only a stable grid but also a friendly regulatory environment.
At the time, Tether planned to collaborate with the local licensed company Microfin to establish two mining sites in Florida Province.
According to estimates from a former contractor, Tether later spent about $60 million on each site, totaling approximately $120 million.
For Tether, this was not just about mining; it was a crucial step in channeling profits into tangible energy infrastructure.
The company was sitting on massive profits, with around $6.2 billion in annual profits for 2023, and was actively diversifying into sectors like energy and AI.
The project started smoothly. A former contractor interviewed by Reuters revealed that both sites were operating normally, generating revenue, and the local team had grown to 38 people.
II. The Power Outage Impasse Triggered by a Number
However, the good times didn't last. The two parties soon reached a deadlock over the most critical issue: power supply.
The root of the conflict lay in a specific number in the power contract. Tether interpreted the contracted power supply volume as a "guaranteed minimum supply," believing they could apply for additional power as the mining farm expanded.
But Uruguay's National Electricity Company (UTE) firmly considered that number to be the "absolute maximum limit," with no allowance for exceeding it.
Yet Bitcoin mining rigs require 24/7 operation.
As the mining facility expanded and power demand increased, the two sites began to face frequent power restrictions. Sometimes, they went several days without sufficient electricity, directly impacting their hashrate revenue.
By the end of 2024, tensions between the parties were already apparent.
In 2025, with the inauguration of Uruguay's left-wing President Yamandú Orsi, the electricity company saw a change in management, which adopted a tougher stance in negotiations.
Communication channels broke down, and the foundation of trust for cooperation began to crumble.
III. Complete Withdrawal Within Five Months
Once trust was broken, the project rapidly spiraled toward an irreversible end.
In May 2025, Microfin stopped paying the electricity bills.
This was followed in June by Microfin formally notifying the power company of its intent to terminate the contract.
According to internal briefings reviewed by Reuters, the power company had prepared a revised contract in an attempt to salvage the project, but Tether's representatives did not attend the signing ceremony.
On July 25, 2025, the power company officially cut off the electricity supply.
Local media *El Observador* reported that by this time, Microfin's debt had approached $5 million, with monthly electricity bills reaching about $2 million. The outstanding amount had surpassed the initial security deposit provided.
On November 25, 2025, Tether formally notified the local labor department of the cessation of operations. Television station Teledoce later confirmed that 30 of the 38 employees had been laid off.
It wasn't until December 2025 that Microfin settled all outstanding debts.
IV. When "Green" Does Not Equal "Cheap"
This exit serves as a reminder for all enterprises making heavy-asset investments abroad.
First, the reality of costs.
Uruguay's electricity is indeed green, but it doesn't hold a clear advantage in the global comparison of electricity prices for mining.
Especially after Bitcoin's halving in 2024 (block reward reduced from 6.25 BTC to 3.125 BTC), profit margins across the entire industry were significantly compressed. The disadvantage of higher electricity prices, previously masked by "green ideals," was quickly magnified.
Second, the certainty of rules.
When Tether entered Uruguay, it was drawn to both the renewable energy and the political stability.
However, the turnover of management at state-owned utility companies following a government change, and the consequent shift in negotiation tactics, is not uncommon in Latin America.
For heavy-asset projects requiring long-term, stable power supply, policy continuity is often harder to predict than electricity prices themselves.
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Although the $120 million loss is entirely manageable for Tether, which reports annual profits exceeding $10 billion and holds its own investment portfolio of over $20 billion, and its ventures in places like El Salvador continue...
...this episode clearly illustrates a business principle.
In the world of heavy-asset operations, no matter how great the computing power, it must be built upon clear contractual consensus and genuine cost advantages.
