Stablecoin issuer Tether has denied reports from local media that it is withdrawing from Uruguay due to a $4.8 million debt dispute with the country's state-owned electricity entity.
According to local news outlet Telemundo, Tether abandoned its cryptocurrency mining operations and future plans after the national power plant and transmission management agency (UTE) cut power to its facilities for failing to pay a $2 million electricity bill in May.
The media also reported that Tether owes approximately $2.8 million to other local projects, bringing its total liabilities to about $4.8 million, excluding fines and additional fees. Telemundo cited local news outlet Busqueda, which first reported the story two days prior.
However, Tether refuted these reports in a comment to Cointelegraph on Monday, stating: "We continue to evaluate the best way forward in Uruguay and the broader region. While there are reports speculating about a withdrawal from the area, these do not accurately reflect the reality."
Tether acknowledged the debt predicament, stating that the local company operating the cryptocurrency mining facility has been in "ongoing discussions with the government to resolve outstanding differences."
"Tether remains supportive of these efforts and advocates for a constructive path forward that reflects our long-term commitment to sustainable opportunities in the region."
Tether announced plans to begin cryptocurrency mining in Uruguay in November 2023, with local media estimating the project investment could reach $500 million.
While Tether denies a withdrawal, local reports have linked the alleged shutdown to high electricity costs, which Tether has not commented on. Uruguay's relatively high electricity costs make it less attractive for energy-intensive businesses like cryptocurrency mining and artificial intelligence.
In Uruguay, electricity prices range from $60 to $180 per megawatt-hour (MWh), significantly higher than neighboring Paraguay, where power can be produced at about $22 per megawatt-hour through the Itaipu hydroelectric plant.
Tether also operates Bitcoin mining facilities in Paraguay.
In 2018, South American Bitcoin mining company Vici Mining moved its facilities from Uruguay to Paraguay to take advantage of cheaper electricity costs.
Vici engineer Nicolás Ribeiro told Telemundo: "If you look at the average electricity price from a global perspective, Uruguay is far above the average. While establishing a business in a new country is always a challenge, when you examine this industry and realize that 80% of operating costs are electricity, this is a very important factor in deciding where to set up operations."
Ribeiro stated that the dispute with Tether should serve as a "warning signal" for policymakers regarding the challenges of attracting and retaining energy-intensive industries.
Reports indicate that Tether is negotiating with UTE for lower electricity prices for its new facilities. Tether has not commented on this matter.
Meanwhile, three automakers—Toyota, Yamaha, and BYD—have recently begun accepting Tether (USDT) stablecoin payments in Bolivia to address the country's dwindling dollar reserves.
In Colombia, MoneyGram, a competitor to Western Union, announced that its cryptocurrency payment app will provide locals with a solution for saving in dollar stablecoins as the Colombian peso continues to weaken.
Related: Opinion: Cryptocurrency Can't Afford Perfect Regulation
Original article: “Tether Denies Reports of Abandoning $500 Million Crypto Project in Uruguay”
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