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Stablecoin issuer Tether has refuted claims that it is abandoning its cryptocurrency mining project in Uruguay. Local media had reported that the company was exiting the country due to a significant debt dispute with a state-owned electricity provider, leading to power being cut at its facilities. Tether has acknowledged discussions to resolve the outstanding issues, emphasizing its commitment to the region.
Key Takeaways
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Tether denies exiting Uruguay despite reports of a $4.8 million debt dispute with UTE.
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Local media cited power being cut due to unpaid electricity bills.
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Tether acknowledges ongoing discussions to resolve "friction" with the government.
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High electricity costs in Uruguay are cited as a potential factor for crypto miners.
Debt Dispute and Power Disruption
Local news outlets, including Telemundo and Busqueda, reported that Tether had ceased its crypto mining operations and future plans in Uruguay. The reports alleged that the National Administration of Power Plants and Electric Transmissions (UTE) disconnected power to Tether's facilities due to an unpaid electricity bill of $2 million for May. Additionally, Tether reportedly owed approximately $2.8 million for other local projects, bringing the total liabilities to around $4.8 million, excluding potential fines and surcharges.
However, Tether issued a statement to Cointelegraph, denying these reports. "While reports have speculated an exit from the region, these do not accurately reflect the situation," a spokesperson stated. The company confirmed that the local entity managing the mining facilities is engaged in "ongoing discussions with the government to resolve the outstanding friction." Tether expressed its continued support for these efforts and its long-term commitment to sustainable opportunities in the region.
High Electricity Costs and Regional Context
The alleged shutdown was also linked to Uruguay's relatively high electricity costs, which can be a deterrent for energy-intensive industries like crypto mining. Electricity prices in Uruguay range from $60 to $180 per megawatt hour (MWh), significantly higher than in neighboring Paraguay, where electricity from the Itaipu hydropower plant costs around $22 MWh. Tether also operates Bitcoin mining facilities in Paraguay.
This situation is not unprecedented in Uruguay. In 2018, Vici Mining, a Bitcoin mining company, relocated its operations to Paraguay to take advantage of lower electricity costs. An engineer from Vici Mining highlighted that electricity constitutes about 80% of operating costs in the industry, making it a critical factor in site selection. They suggested that the dispute involving Tether should serve as a warning to policymakers about the challenges of attracting and retaining energy-intensive businesses.
Stablecoin Adoption in Latin America
Meanwhile, the adoption of stablecoins like Tether (USDT) is growing in Latin America. In Bolivia, three major vehicle manufacturers—Toyota, Yamaha, and BYD—have begun accepting USDT for payments to help customers navigate the country's diminishing U.S. dollar reserves. Similarly, in Colombia, MoneyGram's crypto payments app is offering users a way to save in U.S. dollar stablecoins as the Colombian peso experiences weakening.
Key Takeaways
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Tether Denies Claims it Abandoned Uruguay Crypto Project, Cointelegraph.
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