Tether’s Uruguay Withdrawal Sparks Industry Attention After Energy Dispute Escalates

• Tether exits Uruguay after failed energy talks disrupt major infrastructure plans.
• Rising power costs force Tether to abandon ambitious data center project.
• S&P rating dispute adds pressure as Tether ends Uruguay operations.

Tether’s planned expansion in Uruguay has collapsed after tense negotiations with the state utility UTE failed to produce a competitive energy tariff. The company has now abandoned its investment roadmap and taken steps to liquidate its local workforce following months of stalled discussions.

The move includes the immediate dismissal of 30 of Tether’s 38 employees. Officials at the Ministry of Labor and Social Security confirmed the development after a meeting at the National Directorate of Labor. Reports indicate that internal discussions had been ongoing for months as energy cost pressures intensified.

Also Read: Australia Moves Toward Stricter Crypto Oversight as New Regulatory Bill Advances

Energy Tariff Conflict Forces Strategic Reversal

Besides the layoffs, Tether’s withdrawal reflects concerns about rising costs tied to the 31.5 kV toll applied in Florida. The company noted that the model increased operational expenses instead of supporting its projected investment, and its proposed migration to a 150 kV scheme did not receive approval.

Moreover, the project required significant electricity. Plans included three Data Processing Centers across Florida and Tacuarembó with a combined demand of 165 MW. Additionally, the roadmap highlighted a Wind and Photovoltaic Generation Park with a 300 MW capacity, which added pressure to secure competitive pricing.

According to reports, Tether had already invested $100 million and set aside an extra $50 million for infrastructure that would later be transferred to UTE and the national grid. However, the firm stated that prevailing conditions made it economically unfeasible to move forward with the $500 million plan.

Rating Dispute Intensifies Market Debate

Besides the operational setback, the company also faced scrutiny following S&P’s weak rating for USDT. The firm cited a 5.6 percent Bitcoin holding that surpassed Tether’s 3.9 percent equity buffer. CEO Paolo Ardoino dismissed the assessment and pointed to $10 billion in projected 2025 profits.

Consequently, the shutdown and the rating dispute created a wave of discussion within the digital asset sector. Market watchers noted that both issues appeared during a week of heightened attention on stablecoin risk factors and reserve structures.

Broader Implications for Infrastructure and Policy

Additionally, the developments highlight the financial vulnerability of large scale energy dependent investments in regions without flexible tariff models. Industry observers noted that future negotiations between crypto infrastructure firms and energy regulators may demand more adaptive approaches.

Tether’s complete withdrawal from Uruguay marks a notable shift in its infrastructure strategy. Rising electricity costs and stalled tariff talks pushed the company to terminate a project once valued at $500 million. The exit now places attention on how Tether reallocates its resources following the decision.

Also Read: Mysterious 110,193,345 XRP Move Amid ETF Clients Raking Up Massive XRP – What’s Happening?

The post Tether’s Uruguay Withdrawal Sparks Industry Attention After Energy Dispute Escalates appeared first on 36Crypto.