Ripple announced that Moody’s awarded Ripple USD (RLUSD) an investment-grade rating—a stablecoin first—coming right on the heels of the firm securing final approval for a national trust bank. While the issuer aims for 103% reserve coverage, bankruptcy risks were noted as a key qualifying factor in the evaluation.
Ripple’s RLUSD Earns A2 and P-1 Credit Ratings
On Oct. 27, Moody’s Ratings granted RLUSD A2 long-term and P-1 short-term deposit ratings after evaluating its backing and redemption framework. Standard Custody & Trust Company (SCTC), Ripple’s New York-regulated trust firm, natively issues these stablecoins on Ethereum and the XRP Ledger, where the ratings are applied.
The decision came just a day after the U.S. Office of the Comptroller of the Currency (OCC) granted Ripple final approval for Ripple National Trust Bank, revealed Oct. 26. While SCTC continues as issuer, the bank’s sanctioned duties include overseeing RLUSD reserves and being appointed as collateral trustee for token holders.
Investment-grade scores signal fairly low credit risk. Moody’s places A2 in its upper-medium-grade tier to denote low default exposure, while P-1 stands as its top short-term mark, showing a strong capacity to meet immediate commitments when payments are required.
In an Oct. 27 post on X, Jack McDonald, Ripple’s senior vice president of stablecoins, addressed the new Moody’s scores for RLUSD, which were shared as follows:
“RLUSD is the first stablecoin to have ever received an investment-grade Moody’s rating.”
Bluechip, an independent stablecoin assessment group, earlier awarded RLUSD an A score and top rank on July 18, 2025, using its own risk model. Moody’s evaluated deposit ratings through a distinct method, while Ripple’s landmark claim specifically highlights the investment-grade score that was issued by Moody’s.
Earlier this month, Moody’s assigned Sky Protocol—formerly MakerDAO and manager of the USDS and DAI stablecoins—a B3 long-term counterparty risk rating, marking its initial protocol evaluation. Moody’s assessed the organization itself, treating USDS and DAI as liabilities rather than rating the individual tokens, while B-rated obligations are classified as speculative with substantial credit risk.
Stablecoin Reserves Support Reliable US Dollar Redemptions
SCTC aims for reserve holdings equal to 103% of RLUSD liabilities, surpassing the standard minimum coverage tied to this score, according to Moody’s. The firm’s dollar-backed reserves consist mostly of highly liquid, short-term U.S. government assets and cash, which are stored primarily at The Bank of New York Mellon.
Cash at a secondary depository firm is capped at $50 million, backed by an additional $50 million in Treasury bills kept apart at BNY. On Oct. 27, Ripple and BNY also revealed an expansion of BNY’s custody offerings for XRP and RLUSD, which were extended to institutional token holdings.
Approved, onboarded institutions can cash in each RLUSD for its $1 face value, performing a redemption at par, within two full business days following a valid order. Weekly liquidity stress tests ensure this obligation is maintained.
Operational safeguards include upfront funding prior to token creation, token burning ahead of redemption payouts, daily reconciliations, multisignature controls, and independent smart-contract audits. Monthly CPA attestations offer additional oversight, through which compliance is verified.
Bankruptcy Risks and Protections for Crypto Token Holders
Moody’s highlighted issuer bankruptcy as a potential threat to prompt RLUSD redemptions. An automatic stay, which typically halts enforcement and collection efforts, could postpone payouts. While reserve segregation reduces that danger, SCTC is not a bankruptcy-remote entity and asset ownership is not held directly by token holders.
Moody’s noted that firmer legal protections could pave the way for a higher rating. The credit agency anticipates that the GENIUS Act will reinforce holder safeguards once it takes effect in 2027, under which required reserves are excluded from an issuer’s bankruptcy estate.
The evaluation arrived as RLUSD continues to broaden its reach across platforms. Robinhood intends to launch RLUSD within its app later this year, while Ripple revealed access on Coinbase Prime, Coinbase Exchange, and Coinbase Retail on Oct. 28, with Coinbase Global Exchange support to be added soon.
