Key Takeaways
- Moody’s assigned RLUSD A2 long-term and P-1 short-term deposit ratings a day after Ripple’s trust bank approval.
- The issuer targets 103% reserve coverage, primarily in government assets.
- Issuer bankruptcy could delay redemptions beyond two business days.
RLUSD Receives A2 and P-1 Ratings
Moody’s Ratings assigned RLUSD A2 long-term and P-1 short-term deposit ratings on Oct. 27, assessing its backing and redemption framework. The Moody’s RLUSD deposit ratings apply to stablecoins natively issued on the XRP Ledger and Ethereum by Standard Custody & Trust Company (SCTC), Ripple’s New York-regulated trust company.
The rating came a day after Ripple won final approval from the U.S. Office of the Comptroller of the Currency (OCC) for Ripple National Trust Bank, disclosed Oct. 26. The bank’s approved activities include managing RLUSD reserves and serving as collateral trustee for holders, while SCTC remains the issuer.
Investment-grade ratings indicate relatively low credit risk. A2 falls within Moody’s upper-medium-grade category, indicating low credit risk. P-1 is its highest short-term rating, reflecting a superior ability to meet short-term obligations.
Jack McDonald, Ripple’s senior vice president of stablecoins, discussed RLUSD’s Moody’s ratings in an Oct. 27 post on X stating:
“RLUSD is the first stablecoin to have ever received an investment-grade Moody’s rating.”
Bluechip, an independent stablecoin rating agency, previously assigned RLUSD an A rating and first-place stablecoin ranking on July 18, 2025. That assessment used Bluechip’s stablecoin risk framework. Moody’s assigned deposit ratings under its separate methodology. Ripple’s first-ever claim specifically concerns an investment-grade rating from Moody’s.
Moody’s gave Sky Protocol, formerly MakerDAO and overseer of the USDS and DAI stablecoins, a B3 long-term counterparty risk rating earlier this month, its first rating of a stablecoin protocol. Sky’s rating assesses the protocol as an entity, with USDS and DAI counted among its liabilities, rather than rating either stablecoin. Moody’s classifies B-rated obligations as speculative and subject to high credit risk.
Reserves Support Dollar Redemptions
SCTC targets reserve assets equal to 103% of RLUSD obligations, exceeding the minimum coverage associated with the rating, Moody’s detailed. Its dollar-backed stablecoin reserves predominantly comprise highly liquid, short-duration U.S. government assets and cash, held mainly with The Bank of New York Mellon.
Cash at a separate depository institution is capped at $50 million, supported by another $50 million in Treasury bills held separately at BNY. Ripple and BNY also announced BNY’s XRP and RLUSD custody expansion on Oct. 27, extending services to institutional token holdings.
Eligible, onboarded institutions can redeem each RLUSD for its $1 face value, known as redemption at par, within two full business days after a compliant order. Weekly liquidity stress testing supports this obligation.
Operational safeguards include funding before token issuance, token destruction before redemption payments, daily reconciliations, multisignature controls, and independent smart-contract reviews. Monthly CPA attestations provide further oversight.
Bankruptcy Risks and Holder Protections
Moody’s identified issuer bankruptcy as a risk to timely RLUSD redemptions. An automatic stay, which generally pauses collection and enforcement actions, could delay payments. Reserve segregation mitigates that risk, although SCTC is not a bankruptcy-remote special-purpose entity and holders lack direct ownership of the assets.
Stronger legal protections could support an upgrade, Moody’s said. The agency expects the GENIUS Act to strengthen holder safeguards when effective in 2027, including excluding required reserves from an issuer’s bankruptcy estate.
The assessment came as RLUSD’s distribution expands. Robinhood’s planned RLUSD integration targets app availability later this year. Ripple announced access through Coinbase Prime, Coinbase Exchange, and the Coinbase Retail app on Oct. 28, with Coinbase Global Exchange availability to follow.
