The U.S. Congress recently approved a new piece of legislation known as the Genius Act, which would introduce much-needed openness to the stablecoin industry, and is already impacting the crypto space. Bitcoin dropped 0.3% and XRP fell deeper at 4% after suffering their share of shocks from the bill.
The drop is tiny but one more demonstration of the policy responsiveness of digital assets to changes in the global economy.
Bitcoin, XRP Slide Following New US Stablecoin Bill Announcement ( Image Source: Times Now )
What Is the Genius Act?
The Genius Act is a fresh legislation to govern the rapidly expanding stablecoin economy. The bill requires that any stablecoin issuer in or looking to access the U.S. must:
- Hold reserves in the same 1:1 ratio as issued tokens
- Provide third-party certified companies with regular audits
- Register with federal finance regulators
The bill also aims to ban or significantly regulate algorithmic stablecoins, backed by code rather than assets, in the aftermath of the 2022 disastrous collapse of TerraUSD.
Stablecoins have languished in legal limbo for years. The Genius Act would turn this around by establishing a predictable regulatory environment, safeguarding consumers and ensuring financial clarity.
Market Reaction: Minor Decline, Serious Ramifications
Bitcoin’s small drop may appear insignificant at first glance. But when coupled with the larger drop in XRP, it reflects greater caution among investors and traders.
Institutions don’t care, however. While short-term action will continue, all consider this bill an important step toward mainstreaming. With regulations now defined, institutional players are likely to raise their participation in the space of cryptocurrency.
“Markets abhor uncertainty but adore clarity. If the Genius Act provides regulatory clarity, it can unlock huge capital,” opines Sydney-based blockchain expert Ava Myers.
XRP Takes the Bigger Hit: Why?
XRP, in contrast to Bitcoin, is forever at the center of regulatory controversy. Its more dramatic 4% decline signals that the Genius Act will introduce new hurdles to Ripple using XRP as a cross-border payment vehicle.
The emphasis of the bill on fiat-backed reserves and regulated issuers would strain the status of XRP, particularly if cross-border stablecoin transfers are highly regulated. The model of XRP is most often founded on engagement with fiat systems, and additional regulation on such activities may affect its usability and popularity.
This autumn also comes in the wake of the lawsuits from Ripple to the SEC, only adding more speculation about the fate of XRP in the very near future.
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Bitcoin Shows Mettle: Institutions Stand Firm
Despite its modest decline, Bitcoin is much stronger than the overwhelming majority of altcoins, an affirmation of its more dominant role as a store of value in institutional portfolios.
Asset managers and hedge funds have increasingly used Bitcoin as insurance against economic and inflation volatility. To them, the Genius Act is a harbinger of a coming-of-age market, not a warning.
“Regulation tends to scare retail traders, but institutions view it as a matter of legitimacy,” said Melbourne-based crypto strategist Liam Hart.
Why Stablecoin Rules Matter for Everyone
Stablecoins are more than just digital dollars, they’re the backbone of decentralised finance. Whether you’re borrowing, lending, or trading, chances are you’re relying on a stablecoin.
When confidence in these assets is lost, the entire crypto world bears the brunt. The Genius Act attempts to restore that confidence by having a clear set of regulations and removing high-risk, unregulated entities from the field.
Though the bill per se targets stablecoins, its reach flows over to altcoins, decentralized platforms, and even NFTs. Every segment of the digital asset world is dependent upon the trust and usability stablecoins can provide.
Big moment for crypto — the U.S. just passed a landmark @Stablecoin Bill
After years of debates, confusion, and collapses Washington has finally said :
“Let’s regulate stablecoins the smart way.”Here’s what it means — explained simply
What’s this bill all about… pic.twitter.com/fI0W3ux1ze
— (@Soul_s_Eye) July 25, 2025
What’s Next for Traders and Investors?
Everybody now waits and sees what comes next with the Genius Act in limbo in Congress. Elementary questions now being asked by traders are:
- Will large stablecoin issuers like Circle or Tether participate or push back?
- How would U.S. regulators implement the Act, especially against offshore players?
- Would other virtual currencies be indirectly impacted under these new regulations?
The bill’s passage or defeat can be a guide for future regulation throughout Europe, Asia, and even Australia, where policymakers are keeping a close watch on the American experience.
Bottom Line: Regulation Is on the Way, And It’s Here to Stay
The Genius Act is more than a sound bite. It’s the beginning of a brighter day when crypto transitions from the Wild West to Wall Street. XRP and Bitcoin took some heat today, but the bigger picture is momentum.
Better legislation brings deeper pockets. And with institutions still sending all the right signals, this might be just the beginning of something more enduring.
Traders will have to adapt, but there are higher hopes for those prepared to struggle through a more ordered world.
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