Tether Exits Uruguay, Scraps $500M Project Over Energy Costs

• The Exit: Tether is shutting down its Uruguay operations and laying off 30 employees due to high energy costs.
• The Dispute: The state utility refused Tether’s request to switch to a cheaper 150 kV transmission rate.
• The Cost: Tether is walking away from a planned $500M investment, having already spent over $100M.

Tether, the issuer of the world’s largest stablecoin, has confirmed it will terminate its operations in Uruguay and liquidate its local workforce. The decision follows a breakdown in negotiations with the state-owned utility UTE regarding energy tariffs, forcing the company to abandon a planned $500 million infrastructure investment.

The Economics of the Exit: The withdrawal involves the immediate dismissal of 30 of Tether’s 38 local employees. The Ministry of Labor and Social Security (MTSS) confirmed the layoffs following a Tuesday meeting at the National Directorate of Labor (Dinatra).

High and Unsustainable Energy Costs

Last September, reports emerged about Tether’s plans to end operations in Uruguay following high energy costs and the lack of a competitive tariff framework. Tether believed the prevailing conditions did not reflect the scale of their investment within the region. Hence, the decision was made to cease operations.

For context, Tether projected $500 million in Uruguay, which included the construction of three Data Processing Centers in the departments of Florida and Tacuarembó. The estimated energy demand for the infrastructure was 165 MW, in addition to a 300 MW Wind and Photovoltaic Generation Park.

Tether Already Invested $100 Million in Uruguay

According to reports, Tether had executed $100 million of its target and earmarked an extra $50 million for infrastructure that would become the property of UTE and the National Interconnected System. At the time of termination, Tether noted that prevailing conditions in the region made it economically unfeasible to continue the project, informing its decision to cease operations.

Related: Tether’s Expanding Gold Position Gains Global Attention as Holdings Reach 116 Tons

The Voltage Dispute: 31.5 kV vs. 150 kV

In the meantime, further details show that Tether started requesting a more competitive energy tariff scheme in 2023. 

However, the firm noted that instead of a reduction, the contractual model and the 31.5 kV toll costs applied in Florida increased operating costs. Tether did not get approval for its proposed alternative, which suggested migrating to 150 kV tolls and modifying the power purchase agreement.

S&P Context: A Week of Friction for Tether

Tether’s shutdown in Uruguay comes amid an ongoing clash over a low S&P rating for the stablecoin company. 

According to reports, S&P downgraded USDT’s rating to “weak,” citing a high Bitcoin holding of 5.6%, which exceeds Tether’s 3.9% equity buffer. However, Tether’s CEO Paolo Ardoino has dismissed the rating, citing $10 billion in 2025 profits, while describing S&P’s rating model as “broken.”

Related: S&P Downgrades Tether to ‘Weak’ as Bitcoin Risks Eclipse Safety Buffer