Moody's Rates Ripple's RLUSD Stablecoin A2

Moody’s Ratings has assigned A2 long-term and P-1 short-term deposit ratings to Ripple USD (RLUSD), the dollar stablecoin issued by Ripple’s New York trust company. In its rating announcement, datelined New York, 27 October, the agency says the rating reflects the credit quality of RLUSD’s reserves, how much they exceed the coins in circulation, and how holders can redeem.

A2 sits comfortably inside investment grade on Moody’s scale. Jack McDonald, Ripple’s senior vice president for stablecoins, wrote on X that P-1 is “the highest possible short-term rating under its new stablecoin framework” and that “RLUSD is the first stablecoin to have ever received an investment-grade” rating. Moody’s does not make that claim itself. Its announcement is also blunt about the main weakness: if Ripple’s issuing company failed, holders would not yet have a direct legal claim on the reserve.

In brief

Moody’s has assigned RLUSD A2 long-term and P-1 short-term deposit ratings.
Reserves are mostly short-dated US government assets and cash held at BNY, with a 103% coverage target.
The issuer is not bankruptcy-remote; Moody’s says the GENIUS Act, in force in 2027, would add protections.

What Moody’s rated

The rating covers only RLUSD issued natively by Standard Custody & Trust Company (SCTC), a wholly owned Ripple subsidiary, on the XRP Ledger and Ethereum. RLUSD on any other network falls outside it.

Moody’s says the reserve “is predominantly invested in highly liquid, short-duration U.S. government assets and cash”. SCTC targets reserve coverage of 103%, which the agency says is above the minimum needed for the rating. Most of the reserve, mainly US Treasury bills and cash, is held with The Bank of New York Mellon (BNY) as custodian. A smaller amount of cash, capped at $50 million, sits at another bank and is backed by a further $50 million of Treasury bills in a separate BNY account.

On redemption, Moody’s points to SCTC’s regulatory duty to pay eligible, onboarded institutional holders at par within two business days. It notes that SCTC runs weekly liquidity stress tests and that monthly attestations by independent accountants check the reserve. Its operational review covers controls such as pre-funded issuance, burning coins before paying out, multi-signature key management and independent smart-contract review.

The ratings were solicited, meaning the issuer requested them. Moody’s applied the stablecoin methodology it published in March 2026, and says a fuller new issue report will follow.

The bankruptcy gap behind the A2

The most useful part of the announcement is the paragraph on what happens if things go wrong. Moody’s says “SCTC is not a bankruptcy-remote special-purpose entity”, and that RLUSD holders currently have no direct ownership interest in the reserve. The reserve is kept apart from SCTC’s own assets and held for holders’ benefit, and New York’s financial regulator oversees it. Moody’s treats those as mitigants, not a cure. It adds that in an SCTC bankruptcy, redemption could take longer than two days because of the automatic stay.

That is why the GENIUS Act matters to this rating. Moody’s says the US law, “once in effect in 2027”, will exclude required reserves from an issuer’s bankruptcy estate, and it lists stronger legal protections for holders, including any arrangement giving them a priority claim on the reserve, as a route to an upgrade. The OCC’s final rule under the Act takes effect on 18 January 2027, as TSN reported when it was adopted.

The rating also lands in a busy week for Ripple’s stablecoin. Ripple says it has won final OCC approval for a national trust bank that will look after RLUSD’s reserves, and that Robinhood will add RLUSD to its app. Moody’s text names BNY as the reserve custodian and does not mention the new trust bank. Among its downgrade triggers is the appointment of a new or additional custodian “with materially weaker credit quality”. Any move of reserves will therefore be read against this rating.

A2 for reserves, B3 for a protocol

The contrast with Moody’s earlier stablecoin work is sharp. Three weeks ago the agency gave Sky, the protocol behind USDS and DAI, a B3 rating, well below investment grade, citing a thin equity cushion and coins that cannot be redeemed directly for dollars. RLUSD gets a far higher grade because its holders are, in Moody’s analysis, backed by Treasury bills at a highly rated custodian with a regulated redemption promise.

For banks and funds weighing which stablecoins to hold, that distinction may count for more than the “first” claim. Institutions such as Standard Chartered, which already offers custody for RLUSD, now have a third-party credit opinion to put in front of their risk committees. The rating is on RLUSD itself, not on Ripple Labs or the XRP token.

The next marker is 18 January 2027, when the GENIUS Act takes effect and the statutory protections Moody’s lists as a possible route to an upgrade begin to apply.