In Brief: Moody’s assigned Ripple’s RLUSD an A2 long-term rating and P-1 short-term rating, recognizing its reserve strength and redemption arrangements. Ripple maintains 103% reserve coverag
Ripple’s RLUSD stablecoin has received an A2 long-term credit rating from Moody’s Investors Service, marking a major development for digital payments. According to Moody’s, RLUSD also received a P-1 short-term rating, its highest classification, reflecting strong reserve backing and redemption arrangements.
Moody’s assessment examined RLUSD’s collateral structure, custody arrangements, and redemption requirements to determine its financial reliability. Ripple maintains a reserve target equivalent to 103% of outstanding stablecoin obligations, providing additional collateral coverage for token holders.
Also Read: Ondo Launches Tokenized Robinhood Stock as HOOD Slides 7% After Earnings Miss
Additionally, the reserve portfolio consists exclusively of U.S. dollars and short-term Treasury securities, supporting the stablecoin’s liquidity arrangements. Bank of New York Mellon serves as the primary independent custodian responsible for safeguarding RLUSD’s reserve assets.
Ripple also limits cash deposits at third-party commercial banks to $50 million, with additional protections involving government securities. Meanwhile, Standard Custody & Trust Company must redeem eligible institutional holdings at their dollar value within two business days.
These arrangements supported Moody’s P-1 assessment, representing its strongest short-term credit classification. The A2 rating places RLUSD within the upper-medium investment-grade category, reflecting strong creditworthiness alongside identifiable financial risks.
The ratings follow Ripple’s regulatory progress involving its efforts to establish a federally regulated banking operation. On October 26, Ripple received final approval from the Office of the Comptroller of the Currency to establish Ripple National Trust Bank.
The institution will assume trustee responsibilities for RLUSD reserves, strengthening oversight within the stablecoin’s custody structure. This development connects Ripple’s banking expansion with its institutional payment services and stablecoin operations.
Moody’s also identified legal limitations preventing RLUSD from securing a higher long-term rating under its existing structure. The agency noted that RLUSD’s issuer lacks complete legal separation from potential bankruptcy proceedings involving Ripple’s wider corporate group.
Additionally, token holders lack direct legal claims against reserve assets maintained at BNY Mellon. Court-ordered restrictions involving the issuer could therefore interrupt redemption operations despite existing collateral protections.
Stronger legal separation between reserve assets and issuer bankruptcy risks could support future rating improvements. Ripple’s ratings establish a significant credit benchmark for RLUSD while highlighting the importance of stronger legal protections.
Also Read: Ripple Challenges SEC Crypto Rules, Demands Clearer XRP Trading Protections
The post Ripple’s RLUSD Stablecoin Secures Moody’s A2 Rating in Major Credit Milestone appeared first on 36Crypto.
