Moody's Assigns A2 Deposit Rating to Ripple's RLUSD Stablecoin

Moody's Ratings assigned an A2 long-term and P-1 short-term deposit rating to Ripple's $RLUSD stablecoin on Oct. 27 ¹. The assessment applies exclusively to tokens issued natively on Ethereum and the XRP Ledger by Standard Custody & Trust Company (SCTC), a wholly owned subsidiary of Ripple Labs ¹. Jack McDonald, Ripple’s senior vice president of stablecoins, stated on social media that RLUSD is the first stablecoin to secure an investment-grade rating from the agency ¹.

The rating relied on Moody's dedicated stablecoin methodology published in March 2026 ¹. Backing assets consist primarily of cash and short-duration US government obligations, with SCTC maintaining an overcollateralization target of 103% of total circulating supply ¹. Bank of New York Mellon, rated Aa1(cr) by Moody's, acts as primary custodian for the vast majority of Treasury bills and cash reserves ¹. SCTC can hold up to $50 million in cash at alternative institutions, provided it maintains an equivalent balance of short-term Treasury bills segregated at BNY ¹. Only onboarded institutional counterparties may execute direct par redemptions, which settle on a T+2 schedule ¹.

Bankruptcy Structural Constraints and Upgrade Path

Moody's highlighted structural constraints preventing a higher initial tier: SCTC does not function as a bankruptcy-remote entity, leaving tokenholders without direct ownership claims against reserve holdings ¹. For now, the agency said oversight by the New York State Department of Financial Services (NYDFS) and segregated account titling offset those risks ¹. In an insolvency scenario, an automatic stay could prolong the redemption window ¹.

The rating agency noted that statutory protections under the GENIUS Act, set to take effect in 2027, could clear a path to an upgrade by ringfencing stablecoin reserves from an issuer's bankruptcy estate ¹. Legal arrangements granting tokenholders priority interests in reserve assets would also support a rating increase, whereas control failures, reserve quality deterioration, or lower custodian ratings would prompt a downgrade ¹.

The assessment follows a string of regulatory and banking milestones for the issuer, including Ripple securing final OCC approval to launch a US national trust bank intended to house RLUSD reserves ¹. Ripple originally launched the stablecoin in December 2024 following NYDFS authorization ¹.