Tether Leaves Uruguay, Abandons $500 Million Mining Investment
The Facts
Tether is leaving Uruguay after months of negotiating for better energy tariffs with the national power company (UTE).
According to local press, the company notified of its decision to abandon its mining operations in the country after a meeting with the national labor ministry (MTSS), terminating 30 out of 38 employees on its payroll.
The measure comes after Tether’s Uruguayan subsidiary Microfin had stopped payments to the national power company in July, prompting a power cut situation that affected two mining sites in September.
Nonetheless, at the time, a company spokesperson stated that there was no debt, as UTE had a warranty deposit issued by Tether.
Amid reports of a strategy shift, as increased power costs made its operation economically unfeasible, Tether denied exit allegations in September, reinforcing its commitment to advance these activities in Latin American countries.
At the time, the company stated:
Tether is committed to developing long-term initiatives in Latin America, especially those leveraging renewable energy. We continue to evaluate the best path forward in Uruguay and the broader region.
Tether’s investment plan in Uruguay involved a $500 million investment, which included the development of three data processing centers and a wind farm.
Why It Is Relevant
Tether’s reported exit from Uruguay highlights the difficulties of advancing bitcoin mining projects in a changing environment, where power costs can change at any moment, and governments can introduce new taxes impacting ongoing activities.
Tether’s fallout also affects the government income and the state-owned power company, as the stablecoin company planned to build $50 million worth of power infrastructure that would be owned and managed by the state.
Looking Forward
Tether’s decision will impact mining deployments in other markets, as the company seeks to avoid similar outcomes and aims to secure beneficial pre-deployment deals before committing to large infrastructure investments.
FAQ
Why is Tether leaving Uruguay?
Tether is exiting Uruguay after unsuccessful negotiations for improved energy tariffs with the national power company, UTE.What impact will this departure have on Tether’s workforce?
The company has let go of 30 workers out of 38 in Uruguay, significantly reducing its local operations.What previous issues did Tether face with UTE?
Tether’s Uruguayan subsidiary stopped payments to UTE in July, leading to power cuts affecting two of its sites in September.How does Tether’s exit impact the Uruguayan economy?
Tether’s departure not only affects local employment but also means the loss of a planned $50 million power infrastructure investment.
