Bitcoin: El Salvador Rolls Out Nationwide Acceptance of Bitcoin, Protests Erupt, Bitcoin tumbles 10%

This is Day 1 for El Salvador becoming the first country in the world to accept bitcoin as a legal tender. It's a first for the digital currency.  But despite a relatively smooth rollout plus incentives like $30 in bitcoin for those who sign up, many Salvadorians protested the move. 

Using bitcoin to buy a cup of coffee, clothes, haircut, and even the daily newspaper instead of US dollars is now an option to the people in El Salvador as the country becomes the first in the world to adopt the volatile crypto as its national currency. 

They can even pay their taxes in bitcoin if they want to and that's possible because a key part of this new law that went into effect at midnight actually requires businesses to accept bitcoin. 

It's a big test for bitcoin in the real world, and for Salvadorans.  To get them started the government is giving $30 to people who sign up to an e-wallet called Chivo, which allows for the automatic conversion of dollars to bitcoin and vice versa. 

But not everyone is excited about this.  Nearly 70% of Salvadorians surveyed last week said that they don't support the move and have little or no confidence in Bitcoin.  One big reason is because people don't want their wages to be denominated in Bitcoin. 

Bitcoin is known for its big swings with huge sell-offs that can be triggered by a tweet.  And its decentralized system opens the doors to anonymous and illicit transactions, like money laundering or ransom payments, economists say. 

Also, a lot of people think that El Salvador is not really prepared for this type of adoption.  So many Salvadorans don't have access to fast internet and paying with bitcoin is typically going to demand a smartphone with great internet access. 

President Nayib Bukele

El Salvador's president announced the plan in June, making a surprise appearance via video link at a Bitcoin conference being held in Miami. 

"In the short-term, this will generate jobs and help provide financial inclusion to thousands outside the formal economy." 

 President Nayib Bukele said. 

The government's plan has sparked protests in the impoverished Central American nation.  Not to mention the fact that both IMF and the World Bank have both been vocal skeptics of the law and how it jeopardizes El Salvador's economic stability going forward. 

A number of surveys showed that Salvadorans don't generally want to pay with bitcoin.  The country and President Naib Bukele has also been criticized for basically making it mandatory for merchants in El Salvador.  A lot of people have really criticized this embrace saying that Bukele kind of went too far. 

Now, Bitcoin is down 10%.  The sell-of came on the same day El Salvador launched nationwide acceptance of bitcoin.  And so today was day one you might have had an example of buy the rumor sell the news where people who had loaded up on bitcoin because of this El Salvador news which did drive it a little bit higher at times dumped it today knowing today was day one. 

Bitcoin's adoption as legal tender in El Salvador is unprecedented, and this experiment is going to be closely monitored around the world to see what the consequences could be.