Moody’s Ratings has assigned RLUSD, Ripple’s US dollar-based stablecoin, an A2 long-term and P-1 short-term deposit rating. This marks the first time Moody’s has given an investment-grade rating to a stablecoin, according to statements from Ripple executives. The ratings apply specifically to RLUSD tokens natively issued and operated by Standard Custody & Trust Company (SCTC) on the XRP Ledger and Ethereum.
Moody’s evaluation and risk outlook
Moody’s explained that its assessment relied mainly on the quality of assets backing RLUSD and SCTC’s reserve management. The stablecoin’s reserve is “predominantly invested in highly liquid, short-duration U.S. government assets and cash,” a structure Moody’s considers robust. SCTC aims to maintain reserves at 103% of outstanding RLUSD tokens, surpassing the agency’s requirements for the assigned rating.
Despite this, Moody’s outlined several areas for potential improvement. SCTC is not currently a bankruptcy-remote vehicle, and RLUSD holders do not have direct legal claims to the reserve assets. Moody’s noted that segregating reserves in accounts specifically designated for holders under New York Department of Financial Services (NYDFS) oversight mitigates some risk. Additionally, the agency said the upcoming GENIUS Act, scheduled to take effect in 2027, will introduce statutory protections by ensuring that reserves are excluded from any issuer’s bankruptcy estate.
Moody’s reported that arrangements offering holders a priority interest in the reserves could support a future upgrade, while weaker reserves, less stable custody arrangements, or operational failures might trigger a downgrade.
Reserve structure and redemption process
The bulk of RLUSD’s reserves are under the custody of BNY, which Moody’s rates at Aa1(cr). SCTC maintains the majority of treasury bills and cash at BNY, while up to $50 million can be held at a secondary bank, offset by an equivalent amount of short-term Treasury bills secured in a separate BNY account. This structure is designed to preserve the reserve’s liquidity and accessibility.
Direct redemption at par value is available only to qualifying institutions that SCTC has onboarded, with settlements processed on a T+2 basis. Moody’s indicated, however, that SCTC’s bankruptcy could potentially extend redemption timelines due to the automatic stay procedures involved.
Recent developments for RLUSD and Ripple
Ripple has recently accelerated efforts around RLUSD. The Office of the Comptroller of the Currency (OCC) granted final approval for Ripple National Trust Bank, which will be responsible for holding RLUSD reserves. Ripple also reported that BNY now provides custody services for both RLUSD and XRP on behalf of institutional clients. RLUSD was officially launched in December 2024, following regulatory approval from New York authorities.
Jack McDonald, Ripple’s senior vice president of stablecoins, described RLUSD as “the first stablecoin to have ever received an investment-grade” rating from Moody’s, highlighting what he called a milestone for Ripple’s stablecoin initiative.
With major rating agencies now actively evaluating stablecoins based on underlying assets, ongoing regulatory developments, and institutional backing, managing information and price tracking has become challenging for institutional participants.
To help users follow live stablecoin ratings and reserve changes, CryptoAppsy delivers real-time charts and automated price alerts. With these features, users can easily monitor RLUSD’s market data and stay informed as regulatory and banking relationships evolve.
