Stablecoin heavyweight Tether is shutting down its Bitcoin mining activities in Uruguay, pulling back from what had been one of its most visible forays into the physical infrastructure side of crypto.
The company behind USDT—currently the third-largest cryptocurrency by market capitalization and the most-traded stablecoin in the world—has decided to wind down its operations in the South American nation, citing prohibitively high energy costs as the core reason for the exit, according to local media reports.
Tether, which is formally based in El Salvador, reportedly informed Uruguay’s Ministry of Labor and Social Security that it would be cutting the vast majority of its local workforce. Out of 38 employees in the country, 30 are said to be losing their jobs as part of the shutdown. The company also confirmed its decision to leave the market to crypto-focused media, although it has not publicly elaborated on the long-term implications for its broader mining strategy.
The move comes after months of tension between Tether and Uruguay’s state-owned electricity provider UTE. In September, regional outlets reported that the two parties were embroiled in a dispute over an unpaid bill of around $5 million tied to power consumption for mining operations. While details of any final settlement have not been disclosed, the combination of rising energy expenses and the outstanding debt appears to have made the Uruguayan project economically unsustainable for Tether.
Uruguay had previously looked like a promising staging ground for Bitcoin mining. The country has a strong renewable energy profile—particularly in wind and hydro power—and has marketed itself as a stable, relatively business-friendly jurisdiction within Latin America. For Tether, the move into mining was part of a broader strategy to diversify its revenue streams beyond stablecoin issuance and to deepen its presence in Bitcoin’s underlying infrastructure.
That broader strategy had been supported by the company’s robust financial performance. In October, Tether disclosed that it had generated around $10 billion in profit across the first three quarters of 2025, thanks largely to interest income on the reserves backing USDT. Against that backdrop, the Uruguay withdrawal stands out as a rare retreat, highlighting how even well-capitalized players are not immune to the harsh economics of industrial-scale Bitcoin mining.
Tether’s foray into mining has been framed by the company as a way to reinvest its profits into the Bitcoin ecosystem, while also hedging against its reliance on traditional financial instruments like U.S. Treasuries. By operating or backing mining facilities, Tether could gain exposure to newly issued Bitcoin and potentially secure a strategic foothold in the network’s security infrastructure. The decision to exit Uruguay, therefore, does not necessarily signal the end of that ambition, but it does emphasize how location, regulation, and energy pricing can make or break a mining operation.
Bitcoin mining is notoriously energy-intensive, and profitability is tightly bound to three key variables: electricity cost, hardware efficiency, and the Bitcoin price. When energy prices climb—or when contracts with local utilities sour—miners can quickly find themselves operating at a loss, regardless of scale. Uruguay’s high power costs, as cited by Tether, illustrate the narrow margins that even large players must manage in the post-halving environment, where block rewards are lower and competition among miners remains intense.
The episode also underscores the delicate relationship between crypto firms and state-run infrastructure providers. For governments and public utilities, large mining operations can be both an opportunity and a risk: they bring capital and jobs, but they also demand significant energy resources and can strain local grids if not properly managed. Disagreements over tariffs, capacity, or payment terms can escalate quickly, particularly in countries where energy policy is politically sensitive.
For Uruguay, Tether’s withdrawal is likely to reignite debate over how the country should position itself in the global digital asset economy. On one hand, the failure of a high-profile mining venture may be viewed as a cautionary tale. On the other, the presence of abundant renewables and a relatively clean grid still gives Uruguay a potential edge if it can strike the right balance between attracting investment and protecting domestic consumers from pricing shocks.
For the broader crypto industry, the case highlights a strategic pivot many companies are now facing. As stablecoin issuers earn substantial income from their reserve assets, the question becomes how and where to deploy that capital. Mining, infrastructure investment, and real-world asset tokenization are all on the table, but each carries its own regulatory, reputational, and operational risks. Tether’s experience in Uruguay is a concrete example of how ambitious infrastructure plays can encounter local headwinds.
There is also a growing environmental dimension. While Uruguay’s energy mix is relatively green, the global scrutiny on Bitcoin’s carbon footprint is intensifying. Companies engaging directly in mining must now consider not just profitability, but also how their activities are perceived by regulators, investors, and the public. Operating in regions with renewable-heavy grids is one way to mitigate criticism, yet high costs in such markets can erode the financial upside. This tension between sustainability narratives and bottom-line economics is becoming a structural challenge for the mining sector.
Tether’s retreat may also influence how other crypto enterprises evaluate Latin America as a mining hub. The region offers hydropower in countries like Paraguay and Brazil, geothermal potential in places such as El Salvador, and diverse regulatory frameworks across multiple jurisdictions. However, volatility in energy pricing, political risk, and the strength of local institutions all factor into long-term planning. Firms may become more cautious, demanding clearer contracts and more predictable regulatory environments before committing capital to large-scale facilities.
At the same time, the shutdown does not diminish Tether’s central role in the digital asset market. USDT remains the dominant stablecoin used for trading, remittances, and on-chain liquidity across centralized exchanges and decentralized finance protocols. The company’s capacity to generate large profits from its reserve portfolio gives it financial flexibility that many competitors lack. Whether Tether redirects resources to mining in more favorable jurisdictions, doubles down on financial products, or invests in other forms of infrastructure will be closely watched by both supporters and critics.
In the longer term, the Uruguay chapter may be remembered less as a major setback and more as a high-profile stress test of Tether’s diversification strategy. It reveals how hard it is to translate balance-sheet strength into sustainable, geographically distributed mining operations. It also demonstrates that, in the race to secure Bitcoin’s hash rate, local economics and policy dynamics still matter as much as institutional firepower.
What is clear for now is that Tether is stepping back from one particular experiment in South America, even as it continues to shape the flow of liquidity across the global crypto market through USDT. The company’s next moves—whether in mining, infrastructure, or new financial products—will indicate how it intends to balance its role as a stablecoin issuer with its ambitions to become a broader player in the Bitcoin and digital asset ecosystem.