- Tether shuts down Bitcoin mining operations in Uruguay over high energy prices and regulatory conflicts with UTE.
- The company had invested over $100 million but faced difficulties in reaching a favorable energy tariff agreement.
- Despite the closure, Tether remains committed to Bitcoin mining and continues exploring other global opportunities.
Tether, the issuer of the USDT stablecoin, is shutting down its Bitcoin mining operations in Uruguay due to escalating energy costs. The company, which had invested heavily in the South American country, confirmed the closure and announced that 30 of its 38 local employees would be laid off. This decision comes after a long-standing dispute over energy tariffs with Uruguay’s government-owned power company, UTE.
Energy Prices and Regulatory Disputes Drive Tether’s Exit
Tether had high hopes for getting a major share in the Bitcoin mining industry of Uruguay. The company originally intended to put in a maximum of $500 million, which would consist of setting up data centers and a renewable energy facility. Nevertheless, differing opinions on energy tariffs and regulatory difficulties forced the company to exit the market.
Tether had already invested more than $100 million into its operations and had committed an additional $50 million to infrastructure projects, which would have been handed over to the national grid operator. In its efforts to cut costs, Tether had requested a change to a more competitive electricity rate structure. The company proposed moving from 31.5 kV to 150 kV transmission charges. Tether argued this would reduce costs and avoid redundant infrastructure projects, benefiting both the company and the national grid.
Impact on Employment and Local Operations
The mine closure will definitely affect the employee count significantly. Tether announced that it is going to reduce the number of employees in Uruguay by 30 out of a total of 38. This step is a complete reversal for the company that had previously indicated its intention to increase its operations in the country.
Though Tether has taken this step backward, it has already indicated that it still has a firm commitment to the Bitcoin mining business and that it will be investing in other locations in the future. Challenges are ahead for Tether, but the firm still has the world’s largest Bitcoin miner in view and the same long-term ambition.
The company’s quitting Uruguay does not mean that it is giving up on its mining operations completely. Rather, it shows the company grappling with the costs of mining that come with the high volatility of energy prices in the region. Tether might be compelled to shut down its business in Uruguay, but it will continue to be accessible for new markets. Its exit from Uruguay is a sign of the instability and dangers that exist in the very dynamic crypto mining industry.
