- Moody’s assigned A2 long-term and P-1 short-term deposit ratings to the dollar-backed stablecoin.
- Standard Custody targets 103% reserve coverage, with assets concentrated in government securities and cash.
- The ratings assess credit risk; they do not guarantee the dollar peg or uninterrupted redemption.
Moody’s Ratings has assigned RLUSD an A2 long-term deposit rating and a P-1 short-term deposit rating. The assessment considers reserve quality, liquidity and redemption arrangements supporting the dollar-backed stablecoin. Issued by Standard Custody & Trust Company, Ripple’s regulated subsidiary, the token receives a credit assessment as Ripple expands its institutional custody and payments relationships.
RLUSD reserve quality supports investment-grade assessment
According to the rating announcement, reserves predominantly comprise short-duration U.S. government assets and cash. BNY holds most of these assets, providing third-party custody.
Standard Custody targets 103% reserve coverage, exceeding the minimum coverage associated with the assigned rating. This is a target, rather than proof that the same buffer exists continuously under every market condition.
Moody’s also considered reserve segregation alongside operational, technological, legal and regulatory factors. Its assessment extends beyond the securities held to the arrangements governing their custody and redemption.
A2 falls within the investment-grade long-term category, below the agency’s highest grade, Aaa. P-1 is its highest short-term category, reflecting a different repayment horizon. The two designations should therefore not be described as equivalent scores.
RLUSD rating arrives as institutional custody access expands
Ripple executive Jack McDonald described RLUSD as the first stablecoin to receive an investment-grade Moody’s rating. That distinction is attributed to Ripple and does not establish a universal ranking against competing tokens.
For institutions, a credit opinion can provide another input when assessing settlement or collateral assets. It does not replace onboarding checks, internal eligibility rules or analysis of redemption terms.
Nor does a deposit rating make the token an insured bank deposit. The assessment does not guarantee an uninterrupted dollar peg, immediate redemptions or protection against every operational failure.
Separately, BNY and Ripple announced expanded institutional custody collaboration on October 27. Their announcement placed RLUSD’s market capitalization near $2.5 billion and identified payments, trading and tokenized finance as use cases.
The collaboration also includes exploring tokenized trade finance. Those initiatives are separate from the rating action and do not demonstrate adoption caused by it.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. CoinCryptoNewz is not responsible for any losses incurred. Readers should do their own research before making financial decisions.
