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

According to an October 28, 2026 report, Moody’s assigned Ripple USD (RLUSD) an A2 long-term deposit rating alongside its top short-term score of P-1. While heavy Treasury reserves bolstered the evaluation, deficiencies in legal safeguards for holders weighed on the final grade.

RLUSD Receives A2 and P-1 Deposit Ratings

The dollar-pegged token is issued by Standard Custody & Trust Company, a subsidiary of Ripple. Decrypt noted that A2 stands as Moody’s sixth-highest long-term mark, whereas P-1 represents the maximum short-term designation.

As reported by BeInCrypto, Jack McDonald—Ripple’s senior vice president of stablecoins—highlighted RLUSD as the initial stablecoin to secure an investment-grade score 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

RLUSD’s backing consists mostly of cash, Treasury bills, and additional short-term U.S. government instruments. BNY maintains the vast majority of these holdings, placing liquid access and reserve quality at the core of Moody’s review.

The evaluation also accounted for segregated custody and redemption mechanisms. Qualified institutional participants are able to redeem tokens at par within two business days, establishing a clear pathway for currency conversion.

Standard Custody has established a 103% reserve coverage goal, which functions as an operational target rather than an assessment of the existing coverage ratio.

RLUSD Holder Risks Include Lack of Direct Reserve Ownership

Legal protections remain a vulnerability. Moody’s pointed out that Standard Custody does not operate as a bankruptcy-remote entity, meaning RLUSD holders currently hold no direct ownership claims over the underlying assets.

While custody is segregated, that precaution does not resolve the issue. High asset quality of the Treasurys is distinct from the legal rights holders possess over them.

Moody’s indicated that the upcoming implementation of the GENIUS Act in 2027 will exempt necessary stablecoin reserves from an issuer’s bankruptcy estate, granting holders legal safeguards that are presently absent.

Ripple’s Approved Trust Bank Will Manage RLUSD Reserves

Ripple secured final authorization from the Office of the Comptroller of the Currency for Ripple National Trust Bank on October 26. The institution will oversee RLUSD reserves and serve as their collateral trustee.

Although the bank may handle fiduciary custody, it is prohibited from extending loans or taking standard deposits, which outlines the scope of its operations. Standard Custody will persist in issuing RLUSD under supervision from the New York Department of Financial Services.

These ratings build on Ripple’s broader institutional push following the December 2024 debut of RLUSD. Standard Chartered introduced institutional custody for the token via its Dubai branch earlier in October, and disclosed it was collaborating with Ripple and LMAX Group on a collateral framework enabling clients to utilize RLUSD without transferring it off the bank’s ledger.

?FAQ

01Which blockchains are covered by the reported RLUSD ratings?

The ratings cover RLUSD on Ethereum and the XRP Ledger, the same two networks on which the stablecoin launched in December 2024.

02Who requested Moody’s assessment of RLUSD?

Moody’s said Standard Custody & Trust Company requested the ratings. The issuer is a Ripple subsidiary.

03How quickly can eligible institutional holders redeem RLUSD at par?

Eligible institutions can redeem at par within two business days. The timetable applies to the institutional arrangement Moody’s assessed, not an immediate redemption promise for every token holder.

04What reserve coverage target has Standard Custody set?

Standard Custody has set a 103% reserve coverage target for RLUSD. The figure is a target, not verification that reserves currently stand at that level.

05Which entity will continue issuing RLUSD after the trust bank’s approval?

Standard Custody & Trust Company will remain the issuer under New York Department of Financial Services oversight. Ripple National Trust Bank will manage reserves and act as collateral trustee.

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