Stablecoin Issuer Tether has denied widespread reports from local media that it is withdrawing from Uruguay over a $4.8 million debt dispute with one of its state-owned electricity agency.
According to local news source Telemundo, Tether abandoned crypto mining operations and future plans after minor power in the state management (UTE) of minor power in power plants and electricity transport (UTE) because it failed to pay $2 million in electricity bills in May.
It also reported that Tether owed about $2.8 million against other local projects, bringing about $4.8 million in total debt excluding fines and surcharges, Telemundo cited local news outlet Busqueda, which first reported the news two days ago on Saturday.
However, Tether knocked back the report in a comment to the Cointelegraph on Monday, saying, “We continue to give a more broader assessment of Uruguay and the region’s best practices. The report estimates exits from the region, but these do not accurately reflect the situation.”
Tether acknowledged the debt dilemma and said the local companies operating the crypto mining facility are engaged in “continued discussions with the government to resolve unpaid frictions.”
“Tether continues to support these efforts and constructive progress that reflects our long-term commitment to sustainable opportunities in the region.”
Tether announced plans to begin crypto mining in Uruguay in November 2023. Local media predicts the venture could reach $500 million in investment.
Uruguay’s electricity costs are high on LATAM standards
Tether refused to be ejected, but local reports linked suspected outages to high power costs, but Tether did not comment. Uruguay’s relatively high power costs have reduced its appeal to energy-intensive operations such as crypto mining and AI.
In Uruguay, electricity prices range from around $60 to $180 per megawatt hour (MWH), much higher than in neighboring Country Paraguay, and can produce electricity at about 22 MWh from the Itaimu hydroelectric power plant.
Tether also operates a Bitcoin mining facility in Paraguay.
Tether would not have been the first crypto miner to leave Uruguay.
In 2018, South American Bitcoin mining company Vici Mining moved its facility from Uruguay to Paraguay to take advantage of cheaper electricity costs.
Vici engineer Nicolás Ribeiro told Telemundo: “If we look at average electricity prices globally, Uruguay is far above that. It’s always a challenge to look at the industry and realize that 80% of operating costs are electricity, but it’s a very important factor when it debilitates where you establish yourself.”
Ribeiro said the conflict with Tether should serve as a “warning signal” to policymakers on the challenge of attracting and maintaining an energy-intensive industry.
Tether reportedly was negotiating with UTE for the new facility, where he called for a lower power rate. Tether did not comment on the issue.
Integrated adoption when LATAM increases
Meanwhile, three vehicle manufacturers, Toyota, Yamaha and Bido, have recently accepted Tether (USDT) stablecoin for payments in Bolivia and have begun to deal with the country’s reduced US dollar reserves.
In Colombia, Western Union rival MoneyGram has announced that the Crypto Payments app will offer local people a solution to save US dollar stubcoin as Colombian pesos continue to weaken.
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