Mentioned in This Article
1. Moody's RLUSD rating: what the agency decided
The Moody's RLUSD rating, published on October 28, gives Ripple's dollar stablecoin an A2 long-term deposit rating and a P-1 short-term deposit rating. The token is issued by Standard Custody & Trust Company, a Ripple subsidiary, and its market value is about $2.6 billion. The agency pointed to reserves made up mostly of short-term U.S. government assets and cash.
The rating arrived one day after the Office of the Comptroller of the Currency gave final approval to Ripple National Trust Bank. Taken together, the two events give a stablecoin that has been marketed mainly to institutions a pair of credentials that traditional finance recognizes: a federal banking charter for the entity that will manage its reserves, and an independent credit opinion on the token itself.
The ratings were issued at the request of the issuer, a detail the agency itself noted. Moody's also drew attention to what the grades do not cover, namely protections that holders would want in an insolvency.
2. What do A2 and P-1 mean?
A2 is the sixth-highest grade on Moody's long-term scale, which places it in the upper-medium range of credit quality. P-1 is the agency's top short-term grade, signalling the strongest capacity to meet short-dated obligations. The two ratings are distinct: one looks at the ability to meet obligations over a longer horizon, the other at obligations falling due within roughly a year.
For a stablecoin, the short-term view matters most day to day, because the product's promise is that a token can be turned back into a dollar quickly and at full value. Ratings of this kind are meant to help institutional treasurers, banks and corporate users who must document their credit exposure before they can hold or use a digital asset.
Moody's tied its assessment to the quality of what stands behind the token. The reserves consist chiefly of Treasury bills, other short-term U.S. government assets and cash, with most of the holdings kept by the custodian BNY. Those are among the most liquid and least risky instruments available, which is a large part of why the agency was comfortable with the grade.
Readers should also keep in mind what the scale does not imply. An A2 grade is not the highest tier, and the agency explicitly placed the token below the strongest category on its long-term scale. The qualification reflects structural features, such as the legal position of holders, and not any concern about the quality of the Treasury bills and cash that make up the reserves.
3. How are RLUSD's reserves structured?
RLUSD aims to hold reserves equal to 103% of the tokens in circulation, a cushion above one-for-one backing. The extra three percentage points are intended to absorb small valuation swings or operating costs without leaving the token under-collateralized.
Redemption terms are part of the picture as well. Eligible institutional holders can redeem RLUSD at par within two business days. Par means one dollar per token, and the commitment to it is what keeps a stablecoin's market price close to a dollar.
Ripple National Trust Bank, newly approved by the OCC, will manage the reserves and serve as collateral trustee. Standard Custody will continue to issue RLUSD under the oversight of the New York Department of Financial Services. As a result, the stablecoin will sit under both state and federal supervision.
4. What limits did Moody's identify?
The agency did not offer unqualified praise. It observed that Standard Custody is not bankruptcy-remote, which means the issuer's own insolvency could in principle disturb the reserves that back the token. It also said that holders do not currently have a direct ownership interest in those reserves. Their claim is on the issuer, not on the underlying Treasuries themselves.
Moody's pointed to a legislative fix expected later. The GENIUS Act, the U.S. stablecoin law that is due to take effect in 2027, will exclude required reserves from an issuer's bankruptcy estate. Once it applies, the weakness the agency described should narrow, because the assets backing a stablecoin would be walled off from the issuer's other creditors.
The distinction is important for readers who assume that a high rating means every risk is covered. A rating is an opinion on credit strength given a defined structure. Here the structure currently leaves a legal gap that holders should understand, even if the reserves themselves are conservative.
In practical terms, the gap means a holder's recovery in a hypothetical failure of the issuer would depend on legal processes rather than on an automatic right to the underlying assets. Moody's did not suggest such an event is likely. It simply recorded that, under current arrangements, the legal protection is thinner than the reserve quality might suggest, and that the forthcoming federal law is expected to change this.
5. Why does the OCC approval matter?
A national trust bank charter from the OCC puts an institution under federal supervision for custody and fiduciary activities. For Ripple, it means the entity safeguarding RLUSD's reserves is itself a regulated bank rather than only a state-licensed trust company.
The approval came a day before the rating, and Moody's cited it as context. The sequence suggests a deliberate buildup of institutional credibility for the token. Banks and asset managers considering a stablecoin typically look for both regulatory status and an independent assessment, and RLUSD now has each.
The token's backers include Standard Chartered and Mastercard, both of which carry weight with the institutions Ripple is courting. Their involvement signals that large financial companies see the product as worth supporting, though it is not a substitute for the legal protections Moody's described.
A federal trust charter does not make Ripple National Trust Bank a deposit-taking retail lender. Its role here is narrower: holding the assets that back the token, acting for the benefit of the people who rely on them, and operating under the examination and capital expectations that federal banking supervisors apply to such institutions. For clients that must show their own regulators that a counterparty is supervised, that framing is easier to document than a patchwork of private arrangements.
6. RLUSD's institutional push so far
RLUSD launched in December 2024 and operates on Ethereum and the XRP Ledger. According to CoinGecko, its market capitalization is about $2.6 billion. That is a modest slice of a stablecoin market worth roughly $300 billion, which is dominated by a handful of far larger tokens.
Ripple has directed the token toward institutions rather than retail traders. Earlier this month, Standard Chartered began offering institutional custody of RLUSD through its Dubai branch. The bank is also working with Ripple and LMAX Group on what the companies call collateral mirroring, an arrangement intended to let clients use RLUSD as trading collateral without the tokens leaving the bank's books.
In November 2025, Ripple joined with Mastercard, WebBank and Gemini to explore using RLUSD on the XRP Ledger to settle fiat transactions for the Gemini Credit Card, subject to regulatory approvals. At that point, RLUSD had just passed $1 billion in market value and ranked as the 11th-largest stablecoin, according to DefiLlama. Growth since then has more than doubled the token's market value.
7. Why do ratings matter for stablecoins?
Stablecoins are increasingly used for payments, settlement and as collateral, and large organizations that adopt them need to justify the credit risk to auditors, boards and regulators. An outside rating gives them a standard reference point, in the same way that ratings guide decisions about money market funds and corporate bonds.
Moody's assessment also puts a measurable label on the trade-offs. A strong grade based on Treasury-heavy reserves, paired with a clear note about bankruptcy treatment and ownership rights, gives institutions a concrete list of what to examine. The comparison with other stablecoins will depend on whether competitors seek and receive similar ratings.
For Ripple, whose token is small next to the market leaders, the rating is a differentiator aimed at exactly the customers it wants most: banks and corporates that move large sums and cannot hold an instrument they cannot explain to their own risk committees.
Scale is the other half of the story. At about $2.6 billion, RLUSD is a small fraction of a roughly $300 billion stablecoin market. A rating and a charter can make a token easier for institutions to adopt, but adoption itself is measured in circulation and usage, and those figures will show over time whether the credentials make a difference.
8. What comes next for RLUSD?
The most significant upcoming change is the GENIUS Act taking effect in 2027, which Moody's expects to exclude required reserves from an issuer's bankruptcy estate. That would address one of the main limitations the agency flagged, although the exact effect will depend on how the law is implemented.
In the meantime, the token's institutional rollout continues through Standard Chartered's custody service and the collateral mirroring project with LMAX Group. Ripple National Trust Bank will begin managing the reserves as collateral trustee following its final OCC approval.
Whether the combination of a federal charter, state supervision and an A2 rating translates into larger circulation remains to be seen. For now, the token is still a small player by market value, but it is one of the few with a published credit rating and a regulated structure behind it.
Market participants will also watch whether other issuers pursue ratings of their own, since a wider set of graded tokens would let institutions compare reserve quality and legal structure side by side.