Tether has denied the circulating local media reports claiming its exit from Uruguay involving a $4.8 million debt issue with a state-owned electricity provider.
According to local news outlet Telemundo, the National Administration of Power Plants and Electric Transmissions (UTE) cut power to Tether’s mining facilities due to a $2 million unpaid electricity bill for May, leading to rumors that Tether abandoned its operations and future plans in Uruguay.
Further reports indicated that Tether also owed approximately $2.8 million related to other projects locally, totaling around $4.8 million in liabilities excluding penalties and surcharges, as noted by media Busqueda.
Responding to Coinstelegram on Monday, Tether clarified that these reports do not accurately reflect the situation. They are evaluating the next steps in Uruguay and the broader region, emphasizing their long-term commitment to sustainable growth.
The company acknowledged the debt situation and highlighted ongoing negotiations between the local mining operator and the government to resolve the issues constructively.
Tether remains supportive of these efforts and committed to sustainable opportunities in the area.
Tether initially announced its plans to start crypto mining activities in Uruguay in November 2023, with local media estimates projecting an investment of up to $500 million.
High Electricity Costs Challenge Mining Operations in Uruguay
Despite denying an exit, reports attribute the suspected shutdown to high electricity prices in Uruguay, which Tether has not publicly addressed. The country’s electricity rates, between $60 and $180 per megawatt-hour, are considerably higher than neighboring Paraguay, where costs can be as low as $22 per megawatt-hour thanks to Itaipu hydropower.
Tether also operates Bitcoin mining facilities in Paraguay, benefiting from the lower electric costs.
Tether Not the First Crypto Miner Facing Energy Cost Challenges
In 2018, Bitcoin mining firm Vici Mining relocated from Uruguay to Paraguay to take advantage of cheaper electricity. Engineer Nicolás Ribeiro pointed out that electricity accounts for about 80% of total operating costs, making it a vital factor in choosing the mining location.
Ribeiro remarked that disputes like Tether’s signal challenges for policymakers striving to attract and keep energy-intensive industries.
While negotiations reportedly included requests for reduced electricity rates at a new facility, Tether has not commented on these discussions.
Increasing Stablecoin Adoption Across Latin America
Meanwhile, several automakers including Toyota, Yamaha, and BYD have started accepting Tether (USDT) stablecoin payments in Bolivia, helping mitigate the impact of the country’s dwindling US dollar reserves.
In Colombia, MoneyGram launched a crypto payments application offering users the option to save in US dollar stablecoins to counteract the weakening Colombian peso.
