Tether's Bitcoin Mining Stalls in Uruguay Over $5M Debt

Tether's Uruguay Mining Operations Suspended

Tether, the issuer of USDT, has encountered a setback in Uruguay. UTE, the state-owned electric company, disconnected power to two of Tether's Bitcoin mining facilities due to approximately $5 million in unpaid electricity bills.

Mining Projects Face Suspension

The power disconnection occurred on July 25th, suspending Tether's mining operations. UTE stated the action was necessary due to the significant outstanding balance.

Prior to the shutdown, Tether was reportedly negotiating with UTE for a new mining plant, seeking reduced electricity rates. However, the company began defaulting on existing bills in May.

Tether's monthly electricity bill was around $2 million. UTE cut power when the debt exceeded the guarantee amount, with one project in Flores owing $95 million and another in Florida owing $87 million. The total debt reached approximately $4.8 million, excluding fines.

Despite a memorandum of understanding signed in June, obligating Tether to maintain payments, the power cut proceeded due to non-payment.

Tether Pivots to Brazil for Renewable Mining

Amidst the challenges in Uruguay, Tether has announced expansion plans in Brazil, focusing on renewable energy sources. A memorandum of understanding was signed with Adecoagro on July 3rd.

Juan Sartori, a Tether executive, indicated the Brazil venture aims to combine agriculture, energy, and technology for sustainable cryptocurrency mining.

Implications for Crypto Mining

Tether's Uruguay situation underscores the challenges of energy-intensive crypto mining, highlighting both costs and regulatory considerations. The company's shift towards renewable energy and evolving stablecoin regulations may signal a move towards a more sustainable digital currency future.