Stablecoin issuer Tether has officially ceased its ambitious Bitcoin mining operations in Uruguay, citing unsustainable energy costs and the absence of a clear tariff framework. The company has laid off 30 of its 38 employees in the country, a move confirmed with Uruguay’s Ministry of Labor and Social Security.

Ambitious Plans Meet Financial Reality

The decision marks a sharp reversal from the company’s optimistic entry into the South American nation in May 2023. At the time, Tether announced a collaboration with a local company to launch sustainable Bitcoin mining, with CEO Paolo Ardoino praising Uruguay’s “robust and reliable electrical grid.”

The initial plan was substantial, with a projected investment of $500 million. This included the construction of three data processing centers and a 300-megawatt wind and solar power park. However, the project ran into trouble after spending only $100 million of the planned capital.

Operations began to unravel in July when Uruguay’s national electricity provider, UTE, cut off power to Tether’s facilities. The shutdown was triggered by nearly $5 million in unpaid electricity bills. Despite negotiations through its local subsidiary, Tether couldn’t secure a long-term energy deal or settle its debts.

In a letter to UTE, Tether explained its position, stating, “We believe in the country’s potential, but for projects of this scale, a competitive and predictable tariff framework is essential. The failure to reach an agreement forces us to rethink our strategy.”

A Strategic Pivot, Not an Exit from Mining

While the setback in Uruguay is significant, it doesn’t signal an end to Tether’s broader mining ambitions. The company has publicly stated its goal to control approximately 1% of the global Bitcoin network’s hash rate.

Tether is now focusing its efforts on regions with more favorable energy costs. The company has already announced plans to develop mining facilities in Paraguay and El Salvador, with each site projected to have a capacity between 40 and 70 megawatts. This strategic shift highlights the critical role that predictable and affordable energy plays in the viability of large-scale crypto mining ventures.