Moody's has assigned an A2 long-term deposit rating and a P-1 short-term deposit rating to Ripple USD (RLUSD), the stablecoin issued by Ripple's Standard Custody & Trust Company. The ratings reflect the quality of RLUSD's reserves, which are primarily held in Treasury bills, other short-term U.S. government assets, and cash, with a target of 103% coverage of tokens in circulation. The agency noted that while the reserves are held mostly with custodian BNY, there are gaps in holders' protection, as Standard Custody is not a bankruptcy-remote entity, and RLUSD holders do not currently have a direct ownership interest in the reserves.
The rating comes a day after Ripple secured final approval from the Office of the Comptroller of the Currency for Ripple National Trust Bank, which will manage RLUSD's reserves and act as their collateral trustee. RLUSD will continue to be issued by Standard Custody under New York Department of Financial Services oversight, ensuring both state and federal supervision.
Launched in December 2024 on Ethereum and the XRP Ledger, RLUSD has a market capitalization of about $2.6 billion, according to CoinGecko. Ripple has targeted institutions rather than retail traders, with firms like Standard Chartered and Mastercard backing the stablecoin. Earlier this month, Standard Chartered began offering institutional custody of RLUSD through its Dubai branch, and Ripple has explored using RLUSD on the XRP Ledger to settle fiat transactions on the Gemini Credit Card, pending regulatory approvals.
Moody's also highlighted that the GENIUS Act, the U.S. stablecoin law due to take effect in 2027, will exclude required reserves from an issuer's bankruptcy estate, providing additional protection for RLUSD holders.