Moody’s Gives RLUSD A2 and P-1 Deposit Ratings

According to reporting published October 28, 2026, Moody’s assigned Ripple USD (RLUSD) an A2 long-term deposit rating along with its highest short-term grade, P-1. Treasury-heavy reserves bolstered the RLUSD rating, whereas gaps in legal protections for holders weighed down the evaluation.

RLUSD Receives A2 and P-1 Deposit Ratings

The dollar-backed token is issued by Standard Custody & Trust Company, a subsidiary of Ripple. Decrypt noted that A2 stands as Moody’s sixth-highest long-term grade, while P-1 sits at the very top of the short-term scale.

As detailed by BeInCrypto, Jack McDonald, Ripple’s senior vice president of stablecoins, highlighted RLUSD as the first stablecoin to secure an investment-grade rating from Moody’s. This evaluation supplies institutional risk teams with a familiar credit framework to assess the asset.

Read More: Ripple National Trust Bank: Final OCC Approval, Custody and RLUSD Risks

Treasury Reserves and Two-Day Redemption Support the Assessment

The majority of RLUSD reserves consist of Treasury bills, other short-term US government assets, and cash. BNY maintains the bulk of these holdings, placing reserve quality and ready access to liquidity at the core of Moody’s review.

Segregated custody and redemption terms also influenced the rating. Eligible institutional holders are able to redeem at par within two business days, establishing a defined pathway to convert the token back into dollars.

Meanwhile, Standard Custody has established a 103% reserve coverage target, though this functions as an operating objective rather than a measurement of the present coverage ratio.

RLUSD Holder Risks Include Lack-of-Direct Reserve Ownership

Weak legal protections remain a vulnerability. Moody’s pointed out that Standard Custody does not function as a bankruptcy-remote entity, meaning RLUSD holders currently possess no direct ownership interest in the underlying assets backing the tokens.

While segregated custody helps, it does not erase that worry. The credit quality of the Treasurys and the legal rights holders hold over them represent two distinct matters.

The GENIUS Act is scheduled to go into effect in 2027. Moody’s noted that this legislation will remove required stablecoin reserves from an issuer’s bankruptcy estate, thereby granting holders a legal safeguard they lack at present.

Ripple’s Approved Trust Bank Will Manage RLUSD Reserves

Ripple secured final approval from the Office of the Comptroller of the Currency for Ripple National Trust Bank on October 26. This institution will oversee RLUSD’s reserves and function as their collateral trustee.

Although the bank may deliver fiduciary custody, it is barred from accepting ordinary deposits or issuing loans, which outlines the boundaries of its upcoming duties. Standard Custody will persist in issuing RLUSD under the regulatory supervision of the New York Department of Financial Services.

These ratings build upon Ripple’s broader institutional drive following the December 2024 launch of RLUSD. Earlier in October, Standard Chartered began extending institutional custody of the token through its Dubai branch. The bank also reported collaborating with Ripple and LMAX Group on a collateral framework that would permit clients to utilize RLUSD without transferring it off the bank’s books.

FAQ

Which blockchains are covered by the reported RLUSD ratings?

The ratings apply to RLUSD on Ethereum and the XRP Ledger, which are the two original networks where the stablecoin debuted in December 2024.

Who requested Moody’s assessment of RLUSD?

Standard Custody & Trust Company, a Ripple subsidiary and the token issuer, requested the ratings from Moody’s.

How quickly can eligible institutional holders redeem RLUSD at par?

Eligible institutions are able to redeem at par within two business days. This timeframe relates specifically to the institutional structure evaluated by Moody’s and does not guarantee immediate redemptions for every token holder.

What reserve coverage target has Standard Custody set?

Standard Custody has laid out a 103% reserve coverage target for RLUSD. This figure serves as an objective rather than a confirmation that current reserves sit at that level.

Which entity will continue issuing RLUSD after the trust bank’s approval?

Standard Custody & Trust Company stays on as the issuer under the oversight of the New York Department of Financial Services, while Ripple National Trust Bank handles reserves and acts as the collateral trustee.

This article is for information only and is not financial advice.