Moody's Ratings has assigned an A2 long-term deposit rating and a P-1 short-term deposit rating to Ripple USD (RLUSD), the dollar-backed stablecoin issued by Ripple subsidiary Standard Custody & Trust Company. The ratings, requested by the issuer, reflect the quality of RLUSD's reserves, which are held primarily in Treasury bills, other short-term U.S. government assets, and cash, with most custodied at BNY. Moody's noted that eligible institutional holders can redeem RLUSD at par within two business days.
The agency highlighted specific structural gaps in holder protection, observing that Standard Custody is not a bankruptcy-remote entity and that RLUSD holders do not currently possess a direct ownership interest in the reserves. However, Moody's indicated that the GENIUS Act, a U.S. stablecoin law scheduled to take effect in 2027, will exclude required reserves from an issuer's bankruptcy estate, potentially mitigating these risks. This assessment follows 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 remains under New York Department of Financial Services oversight, placing it under dual state and federal supervision.
Launched in December 2024 on Ethereum and the XRP Ledger, RLUSD has a market capitalization of approximately $2.6 billion, representing a small fraction of the broader $300 billion stablecoin market. Ripple has focused its strategy on institutional adoption rather than retail trading. Recent developments include Standard Chartered beginning institutional custody services for RLUSD through its Dubai branch and exploring a "collateral mirroring" setup with LMAX Group. Additionally, Ripple partnered with Mastercard, WebBank, and Gemini in November 2025 to explore using RLUSD on the XRP Ledger for settling fiat transactions on the Gemini Credit Card, pending regulatory approvals.
The assignment of an A2/P-1 rating to RLUSD signals growing institutional confidence in the creditworthiness of stablecoin issuers, particularly those backed by high-quality liquid assets like U.S. Treasuries. By securing this rating shortly after obtaining OCC approval for its national trust bank, Ripple demonstrates a strategic alignment with traditional financial standards. This move positions RLUSD as a viable option for conservative institutional players who require rigorous credit assessments before integrating digital assets into their balance sheets or settlement workflows.
However, the explicit identification of legal vulnerabilities regarding bankruptcy remoteness and direct reserve ownership highlights the transitional nature of the current regulatory landscape. While the upcoming GENIUS Act promises to resolve these structural issues by protecting reserves from issuer insolvency, the interim period presents operational risk for holders. Market participants must weigh the strength of the asset backing against the current lack of full legal insulation, making the timeline for the 2027 implementation a critical factor for long-term institutional commitment.
