--- title: "Moody's Assigns A2 Deposit Rating to Ripple's RLUSD Stablecoin" description: "The rating agency paired the long-term A2 grade with a P-1 short-term rating, citing high reserve quality alongside potential upgrade paths under the GENIUS Act." url: https://basisdesk.news/news/moodys-assigns-a2-deposit-rating-ripple-rlusd published: 2026-10-28T13:51:22.638Z modified: 2026-10-28T13:51:22.638Z section: Stablecoins & Payments author: Basis Desk Newsroom (AI-generated, source-verified) sentiment: bullish tickers: [RLUSD, XRP, ETH] tags: [rlusd, ripple, moodys, credit-ratings, genius-act, bny] license: Quote with attribution to Basis Desk (basisdesk.news). Not financial advice. --- # Moody's Assigns A2 Deposit Rating to Ripple's RLUSD Stablecoin The rating agency paired the long-term A2 grade with a P-1 short-term rating, citing high reserve quality alongside potential upgrade paths under the GENIUS Act. ## At a glance - **What happened:** Moody's assigned an A2 long-term and P-1 short-term deposit rating to Ripple's RLUSD stablecoin on Oct. 27. - **Why it matters:** The investment-grade rating confirms reserve backing quality while identifying bankruptcy remoteness as the primary hurdle to higher tiers. - **Who is affected:** Institutional holders of RLUSD on Ethereum and XRP Ledger, Ripple Labs, and reserve custodian BNY. - **Takes effect:** 2026-10-27 - **What's next:** The implementation of the federal GENIUS Act in 2027 to provide statutory reserve segregation. - **Status:** announced - **Primary source:** [Moody’s Assigns A2 Deposit Rating to Ripple’s RLUSD, Ties Upgrade Path to GENIUS Act](https://unchainedcrypto.com/moodys-assigns-a2-deposit-rating-to-ripples-rlusd-ties-upgrade-path-to-genius-act/) — unchainedcrypto.com ## Key points - Moody's assigned an A2 long-term and P-1 short-term deposit rating to Ripple's RLUSD issued natively by SCTC on Oct. 27. - Reserve holdings target 103% backing in cash and short-duration Treasuries, primarily custodied at Aa1(cr)-rated BNY. - Moody's identified SCTC's lack of bankruptcy remoteness as a key constraint, citing the GENIUS Act in 2027 as a potential upgrade catalyst. ## Editorial remark - **Context:** Ripple launched RLUSD in December 2024 under NYDFS oversight and subsequently pursued federal banking charters to scale institutional adoption of its native stablecoin reserves. - **Impact:** Institutional stablecoin users gain an audited, investment-grade credit benchmark for RLUSD, potentially lowering risk thresholds for corporate treasuries and regulated settlement systems. - **Watch:** Implementation of the federal GENIUS Act statutory protections in 2027, alongside any operational transfers of reserves to Ripple National Trust Bank. 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](https://basisdesk.news/news/ripple-gets-final-occ-approval-national-trust-bank) intended to house RLUSD reserves [1]. Ripple originally launched the stablecoin in December 2024 following NYDFS authorization [1]. ## FAQ **What assets back Ripple's RLUSD reserves?** RLUSD is backed predominantly by short-duration US Treasury bills and cash, with SCTC targeting 103% reserve collateralization primarily custodied at BNY. **Why did Moody's cap the initial rating at A2?** Moody's noted that issuer Standard Custody & Trust Company is not bankruptcy-remote, meaning stablecoin holders do not hold a direct ownership interest in the underlying reserve. **What could trigger an upgrade for RLUSD's credit rating?** Moody's stated that establishing priority holder interests in reserves or the implementation of the GENIUS Act in 2027 could support a higher rating. ## Sources 1. [Moody’s Assigns A2 Deposit Rating to Ripple’s RLUSD, Ties Upgrade Path to GENIUS Act](https://unchainedcrypto.com/moodys-assigns-a2-deposit-rating-to-ripples-rlusd-ties-upgrade-path-to-genius-act/) — unchainedcrypto.com, 2026-10-28 --- Basis Desk Newsroom · AI-generated, source-verified · https://basisdesk.news/about/how-we-use-ai