According to Cointelegraph, stablecoin issuer Tether has refuted claims from local media that it is withdrawing from Uruguay due to a $4.8 million debt issue with a state-owned electricity provider. Reports from Telemundo suggested that Tether halted its crypto mining operations after the National Administration of Power Plants and Electric Transmissions (UTE) cut off power to its facilities over an unpaid $2 million electricity bill for May. Additionally, Tether was reported to owe approximately $2.8 million for other local projects, bringing its total liabilities to around $4.8 million, excluding fines and surcharges. However, Tether dismissed these reports, stating that they do not accurately reflect the situation. The company acknowledged the debt issue and mentioned ongoing discussions with the government to resolve the matter, emphasizing its commitment to sustainable opportunities in the region.
Tether had announced plans to start crypto mining in Uruguay in November 2023, with local media estimating potential investments of up to $500 million. Despite denying an exit, local reports linked the alleged shutdown to high electricity costs, which Tether did not address. Uruguay's electricity prices, ranging from $60 to $180 per megawatt hour (MWh), are significantly higher than those in neighboring Paraguay, where electricity costs around $22 MWh from the Itaipu hydropower plant. This cost disparity has made Uruguay less appealing for energy-intensive operations like crypto mining. Tether also operates Bitcoin mining facilities in Paraguay, where electricity is cheaper.
In 2018, Vici Mining, a South American Bitcoin mining company, relocated its facilities from Uruguay to Paraguay to benefit from lower electricity costs. Vici engineer Nicolás Ribeiro highlighted that Uruguay's electricity prices are above the global average, making it challenging for energy-intensive industries to establish operations there. He suggested that Tether's dispute should serve as a warning to policymakers about the difficulties of attracting and retaining such industries. Tether was reportedly negotiating with UTE for a new facility with reduced electricity rates, but the company did not comment on this matter.
Meanwhile, stablecoin adoption is on the rise in Latin America. In Bolivia, vehicle manufacturers Toyota, Yamaha, and BYD have begun accepting Tether (USDT) as payment to address the country's dwindling US dollar reserves. In Colombia, MoneyGram, a competitor to Western Union, announced that its crypto payments app would allow locals to save in US dollar stablecoins as the Colombian peso continues to weaken.