Tether: Company owes $5 million for electricity in Uruguay

Stablecoin giant Tether has diversified its business in recent years, including getting into Bitcoin mining. It is in this context that the company has installed infrastructure in Uruguay, where it is currently facing a major problem: a debt of nearly 5 million dollars to UTE, the national electricity supplier. This situation has led to a power outage that has paralyzed its operations since last July. We take stock in this article.

Tether no longer pays its electricity bill in Uruguay

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Tether, through its subsidiary Microfin, was negotiating with UTE for a new mining facility and asking for a tariff reduction. However, according to local media outlet Busqueda, in May, the company stopped paying its electricity bills, accumulating a debt of $4.8 million. Faced with this situation, the UTE cut off electricity in July, after the debt exceeded the amount of collateral provided by Tether.

The debts relate to two major projects: the Camino a Carreta Quemada project in Flores, and the Colonia Sánchez project in Florida. In June, despite a memorandum of understanding signed between UTE and Tether, the condition of paying the debts was not met by the crypto firm.

A blow to Tether’s ambitions

Uruguay, with its “robust and reliable power grid,” had been chosen by Tether for its crypto mining operations. Paolo Ardoino, head of Tether, had stressed in 2023 that the country offered a solid foundation for the company’s activities. However, this power cut puts Tether’s investments in the region at risk.

While Tether was even considering expanding its mining projects in Brazil, using renewable energy in collaboration with Adecoagro, the situation in Uruguay could dampen its ambitions. Juan Sartori, Tether’s head of business initiatives, said the collaboration with Adecoagro would explore new intersections between agriculture, energy, and technology.

The case comes as Tether continues to diversify its business, including the recent announcement of its expansion into Brazil. However, the colossal debt in Uruguay may well slow down its expansion plans in South America.