Moody's Assigns A2 Rating to Ripple's RLUSD Stablecoin

Moody's Ratings has assigned an A2 long-term and P-1 short-term rating to the Ripple USD stablecoin. The dollar-backed digital asset currently holds a market capitalization of approximately 2.6 billion dollars.

The ratings reflect the quality of the project's reserves. Funds are primarily allocated in U.S. Treasury bills and short-term government assets held under BNY custody. The issuance is managed by the subsidiary Standard Custody under the supervision of the New York Department of Financial Services.

The classification was released one day after Ripple received final approval from the Office of the Comptroller of the Currency for the Ripple National Trust Bank. This institution will be responsible for managing reserves and acting as a custodian for the stablecoin's collateral.

Moody's noted that asset holders do not currently have a direct claim on the reserves. The agency highlighted that the issuing entity is not bankruptcy remote. However, legislation slated for 2027 is expected to exclude required reserves from the issuer's bankruptcy estate.

The project focuses on serving the institutional market rather than retail investors. Recent partnerships include custody services provided by Standard Chartered and trials for settling financial transactions on credit cards.