Moody's RLUSD rating of A2 gives Ripple an investment-grade badge

Ripple's stablecoin now carries the kind of label bank treasurers recognize. The Moody's RLUSD rating, announced this week, gives Ripple USD an A2 on the long-term deposit scale and P-1 on the short-term scale, both investment grade.

What happened

A2 is the sixth-highest grade on Moody's long-term scale and P-1 is its top short-term grade, Decrypt noted. The agency said the ratings reflect reserves made up mostly of Treasury bills, cash and other short-dated US government paper, largely held at custodian BNY, which Moody's rates Aa1. The issuer, Ripple's Standard Custody & Trust Company, targets 103% reserve coverage, above the minimum associated with the rating. Eligible institutional holders can redeem at par within two business days.

Moody's also listed weaknesses. Standard Custody is not bankruptcy-remote, Decrypt reported, and RLUSD holders have no direct ownership claim on the reserves for now. Once the GENIUS Act applies from January 2027, required reserves will sit outside an issuer's bankruptcy estate. The rating could fall if reserve quality, coverage or liquidity weakens, and it was requested by the issuer.

Ripple's Jack McDonald called RLUSD "the first stablecoin to have ever received an investment-grade" Moody's rating, according to CryptoWatchDesk, which said it had not verified that claim. Moody's earlier gave Sky Protocol, the USDS issuer, a B3 issuer rating, a different kind of assessment.

Why it matters

The Moody's RLUSD rating arrives a day after the OCC gave final approval to Ripple National Trust Bank, which will manage the token's reserves, as covered in our story on the Ripple trust bank. Together, a federal charter and an investment-grade score give banks and funds familiar yardsticks for deciding whether they can hold the coin or accept it as collateral.

RLUSD remains small, with a market value of about $2.6 billion according to CoinGecko data cited by Decrypt, against a stablecoin market of some $300 billion. Ripple has aimed it at institutions, and Standard Chartered already offers custody, as we reported on the Standard Chartered RLUSD custody launch. A rating is an opinion on credit risk, not a promise of redemption or a guard for the peg.

Ripple is building around that institutional angle. Standard Chartered, Ripple and LMAX Group are building a collateral setup that would let clients post RLUSD without moving it off the bank's books, Decrypt said. RLUSD went live in December 2024 on both Ethereum and the XRP Ledger. It is issued under New York Department of Financial Services oversight, which, with the national trust bank, puts it under both state and federal supervision.

What's next

After the Moody's RLUSD rating, rival issuers may seek their own grades, and the GENIUS Act's start in 2027 could change Moody's view of holder protection. The rating action is on Moody's website.