How Tether’s bitcoin mining plans in Uruguay unraveled

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MONTEVIDEO/PARIS, Aug 21 (Reuters) – Uruguay seemed like the perfect place for cryptocurrency giant Tether to launch a bitcoin mining operation.

The company, which has issued nearly two thirds of all stablecoins in circulation, picked this still largely agricultural corner of South America that has in recent years become a hub for global fintech firms, helped by its reputation for political stability and favorable tax conditions.

In 2023, Tether said it would build two mining sites in Uruguay, part of a spending spree it said would ‌bring economic development, new energy infrastructure and jobs to the country.

But amid a dispute over the amount of energy that would be supplied for its thirsty bitcoin mining, the plans unraveled and the mining sites were abandoned, a Reuters review of documents and interviews with multiple people reveals. ‌Little was left to show for a project that one person with direct knowledge estimated likely cost around $120 million.

Tether did not respond to requests for comment for this article.

The aborted Uruguay investment offers a rare window into the often opaque operations of Tether, as it seeks to expand and reinvest its vast profits into industries as varied as brain implants and soccer.

It also demonstrates how the ​basic economics of bitcoin mining — turning cheap energy into crypto profits — may no longer be adding up, after crypto prices dropped and as energy prices rise.

Tether’s ability to quickly dip in and out of Uruguay is typical of the “hypermobile” nature of bitcoin mining activity, which does not tend to create substantial long-term jobs or benefits for the host country, said Pete Howson, an assistant professor at Northumbria University.

“This plug-and-play infrastructure is very easy to do — literally pulling the plug and then move it to somewhere else,” he said.

In May 2023, Tether announced the launch of bitcoin mining operations in Uruguay, without disclosing an investment value. It called Uruguay the “perfect platform,” citing its abundant renewable energy and robust grid.

Tether CEO Paolo Ardoino and chairman Giancarlo Devasini are frequent visitors to Uruguay’s booming beach resort of Punta del Este — dubbed the Monaco of South America — where they host private gatherings, industryding a $10 million residential compound nearby

At the time, Tether said the plan ‌involved “investing re

Source: ca.finance.yahoo.com