Moody’s has assigned Ripple’s RLUSD stablecoin an A2 long-term and Prime-1 short-term deposit rating, bringing its new credit assessment framework to a dollar-backed token issued on the XRP Ledger and Ethereum.
Summary
- Moody’s assigned RLUSD an A2 long-term rating and its highest short-term grade, P-1.
- The rating covers RLUSD issued by Standard Custody on XRP Ledger and Ethereum.
- Reports describe 103% reserve coverage, with BNY serving as the primary reserve custodian.
- RLUSD’s rating coincides with new banking relationships and approximately $2.5 billion in circulating supply.
- S&P has assessed USDC and USDT, but its stablecoin scores differ from Moody’s deposit ratings.
According to a Moody’s rating notice and comments from Ripple executive Jack McDonald on October 28, the assessment covers RLUSD obligations issued by Standard Custody & Trust Company, Ripple’s New York-regulated subsidiary. McDonald described RLUSD as the first stablecoin to receive an investment-grade Moody’s rating, although the agency’s publicly accessible notice does not provide its full analytical rationale.
Meanwhile, the announcement arrived during Ripple’s Swell conference week, when the company was announcing new banking and custody partnerships.
A credit rating offers institutions a familiar way to evaluate an issuer’s repayment capacity, but it does not guarantee redemption, prevent changes to the dollar peg or establish that banks have approved RLUSD for use.
Moody’s evaluates RLUSD reserves and redemption risks
Moody’s describes its new stablecoin methodology as a framework for assigning deposit ratings to fiat-backed tokens, examining reserve asset quality, legal segregation and liquidity. The approach draws on credit analysis used in conventional finance while addressing the structure of stablecoin obligations.
Under the agency’s published scales, A2 falls within the investment-grade long-term category, while Prime-1 is its highest short-term category. An A2 rating is not Moody’s top long-term grade; that distinction belongs to Aaa. The two ratings therefore describe different repayment horizons and must not be presented as interchangeable.
RLUSD’s reserves reportedly consist principally of cash and short-dated U.S. government securities, with BNY serving as the primary custodian. Reports of Moody’s assessment put reserve coverage at approximately 103% of outstanding tokens. That figure indicates assets exceeding the token liabilities at the reported measurement point, not a permanent buffer against every liquidity or operational risk.
Standard Custody operates under oversight from the New York State Department of Financial Services. The rating does not turn RLUSD into an insured bank deposit, and the available announcement does not establish how much of the reserve portfolio can be liquidated immediately during unusually heavy redemption requests.
RLUSD rating arrives during Ripple’s banking expansion
In an October 27 announcement, Ripple and BNY expanded their institutional custody collaboration, adding custody support for XRP and RLUSD and exploring tokenized trade finance. As crypto.news reported on the BNY expansion, the bank already serves as RLUSD’s primary reserve custodian, separating that established relationship from the newly announced services.
BNY’s statement placed RLUSD’s market capitalization near $2.5 billion and described its use in payments, trading and tokenized finance. The figure represents tokens outstanding at the time of the disclosure, not the amount held or transferred by institutional customers.
Other banking relationships have been developing separately. Standard Chartered launched institutional RLUSD custody through its Dubai International Financial Centre branch on October 12, while a proposed collateral arrangement with LMAX Group remains subject to additional approvals and testing.
Ripple’s agreement with Cross River Bank concerns integrating RLUSD into the bank’s payment infrastructure for dollar transfers and round-the-clock settlement. The announced agreement does not establish that every Cross River customer can already make stablecoin payments.
Stablecoin ratings remain different across agencies
Moody’s rating is distinct from the stablecoin stability assessments published by S&P Global Ratings. S&P assesses how reliably a token can maintain its reference value using a numerical scale, and has already assessed both Circle’s USDC and Tether’s USDT.
S&P gave USDC a score of 2, indicating strong stability, in its December 2025 assessment. It rated USDT at 5, or weak, in November 2025, citing concerns including reserve composition and transparency. Neither finding is an A2 or P-1 deposit rating, so the scores cannot be compared directly with RLUSD’s new grades.
No public announcement examined for this report establishes that Circle or Tether has applied for a rating under Moody’s new methodology. A future application would be a decision for the issuer and rating agency, not an automatic consequence of RLUSD’s assessment.
Institutional use still depends on eligibility and operations
In announcing the rating, McDonald said the agency examined reserve credit quality, redemption arrangements, custody relationships, regulatory oversight and operating controls. His statement describes the assessment’s scope but is not a substitute for the underlying full rating opinion.
For institutional users, onboarding and asset eligibility remain separate decisions. Standard Chartered’s existing custody service provides one confirmed example of bank support, while its planned collateral service illustrates that holding an asset and accepting it for credit or margin purposes involve different operational approvals.
Ripple has not disclosed any new RLUSD transaction volume, bank mandate or redemption activity attributable specifically to the Moody’s decision. The accessible rating materials likewise do not identify the next review date or conditions that could lead Moody’s to change its assessment.
