Tether, the company behind the USDT stablecoin, has paused its Bitcoin mining operations in Uruguay and dismissed approximately 30 employees, signaling challenges for its “sustainable mining” ambitions despite the country’s abundant renewable energy.
The company confirmed the suspension, citing a rise in energy costs as the primary reason for halting operations in the South American nation. This decision marks a significant shift for a project once touted for its commitment to green energy.
Tether formally notified Uruguay’s Ministry of Labor of the operational suspension and the resulting layoffs. The move raises questions about the future of its projected $500 million investment in the country.
The suspension follows weeks of financial disputes, during which Tether initially denied rumors of a complete withdrawal from Uruguay. However, the company acknowledged a financial conflict involving a reported $4.8 million debt.
Reports indicated this debt included an outstanding $2 million electricity bill owed to the state-owned Administración Nacional de Usinas y Trasmisiones Eléctricas (UTE), alongside an additional $2.8 million related to other local projects.
Tether had launched its “sustainable Bitcoin mining operations” in Uruguay in May 2023, partnering with an unnamed local licensed company. At the time, Paolo Ardoino, now CEO, highlighted Uruguay’s extensive renewable energy capacity as ideal for the project.
Local media, including El Observador, reported that Tether had already invested at least $100 million in mining operations and an additional $50 million in electrical infrastructure and logistics as part of its broader investment plan.
Despite the current pause, Tether reiterated its commitment to its long-term strategy in Latin America, focusing on renewable energy projects. The company stated it is exploring the best path forward for its presence in Uruguay and the wider region.
The halt underscores the economic sensitivities of operating Bitcoin mining, even in countries celebrated for their renewable energy infrastructure, challenging the feasibility of “sustainable” crypto operations under fluctuating cost conditions.