Tether Shuts Down Mining Operations in Uruguay
Tether, a major player in the cryptocurrency sector, is beginning the process of shutting down its mining activities in Uruguay, largely driven by soaring energy prices. Since 2023, the firm has been in discussions with UTE, Uruguay’s state-run electricity provider, in hopes of negotiating more favorable operational conditions, but no agreement has been reached.
Despite Tether’s ambitions to transform Uruguay into a central hub for cryptocurrency mining, these negotiations have faltered, compelling the firm to completely retract its operations in the region.
Negotiations and Challenges
Local media outlets report that Tether had been attempting to negotiate revised tariffs with UTE for over a year, seeking to mitigate excessive electricity costs that threatened the viability of its mining initiatives. However, UTE did not approve the requested terms, resulting in a deadlock.
In a formal correspondence sent to UTE in early 2024, Tether expressed concern over the repercussions of this stagnation, highlighting the need for a “competitive and predictable tariff framework” for large-scale projects like theirs to thrive.
The letter emphasized the disappointment of not reaching a suitable agreement, which has forced Tether to reevaluate its strategy moving forward.
Future Plans and Financial Impact
The company announced plans to completely wind down its operations by 2025, marking the end of an effort that could have positioned Uruguay as a leader in technological advancements and renewable energy utilization within the region. Tether’s investment in the two mining sites exceeded $100 million, with intentions to further inject over $500 million into additional projects, such as establishing a solar and wind energy facility.
Previously in July, UTE had cut power to two of Tether’s facilities due to unpaid debts amounting to nearly $5 billion. However, Tether clarified that these debts were secured by a warranty deposit put up for their electricity usage. A spokesperson for the firm reassured that the exiting from the country would not leave any financial burdens on the state, citing the warranty deposit as a protective measure against such issues.
