Tether has abandoned a Bitcoin mining buildout in Uruguay that a former contractor estimated cost roughly $120M, after a dispute with state-owned utility Administración Nacional de Usinas y Trasmisiones Eléctricas (UTE).
The dispute is over how much electricity the stablecoin issuer's contract actually guaranteed, according to a Reuters investigation reviewed by Kontan.
This is not simply a stalled construction project. It is a case study in how a single clause in a power supply contract and a change of government can unwind a multi-year industrial commitment, even for a company controlling roughly $183Bn in stablecoin issuance.
The Tether Bitcoin Mining Contract Dispute in Uruguay that Led to the Operation Being Canned
Tether announced plans in 2023 to build two mining sites in Uruguay's Florida Department, framing the country as an ideal location given its renewable energy supply, grid reliability, political stability, and favorable tax treatment.
The local entity, Microfin, operated both facilities and initially generated revenue without incident. The conflict centered on interpretation: Tether and a former contractor read the contracted electricity figure as a minimum baseline that could be scaled up as the facilities expanded.
This is while UTE treated the same number as a maximum allocation that could not be exceeded without a new agreement, according to a former Tether contractor and a source at UTE.
Internal UTE documents from 2025, reviewed by Reuters, show the disagreement dated back to at least November 2024, and as demand grew, the sites reportedly went days without sufficient power.
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The dispute escalated after Uruguay's leftist government took office in March 2025 and installed new UTE leadership that took a firmer stance on Tether's renegotiation requests.
Two months later, in May 2025, Microfin stopped paying its electricity bills, and by June it had notified UTE of its intent to terminate the contract.
UTE's board approved a memorandum of understanding and a draft new contract, but Tether representatives did not appear for the signing. With the memorandum unsigned and bills unpaid, UTE cut power to the sites on July 25, 2025.
In November 2025, Tether informed Uruguay's labor authorities it would halt operations and lay off most staff; Microfin settled its outstanding debt with UTE in December 2025.