International credit rating agency Moody’s Ratings assigned Ripple’s dollar-pegged stablecoin Ripple USD (RLUSD) a long-term deposit rating of A2 and a short-term rating of P-1, a day after Ripple received final approval to establish a national trust bank in the US. The A2 rating is the sixth-highest on Moody’s long-term scale and is investment grade, while P-1 is the agency’s highest level of short-term creditworthiness.

RLUSD is issued by Ripple subsidiary Standard Custody & Trust Company on the Ethereum and XRP Ledger networks. The asset has a market capitalization of about $2.6 billion, according to CoinGecko.

Reserves and redemption terms

Moody’s analysts considered the quality and market value of RLUSD’s reserve assets, reserve coverage and liquidity, token redemption terms, and operational and regulatory risks.

The stablecoin is primarily backed by short-term US Treasury securities, other government instruments, and cash. A significant portion of the reserves is held in custody at The Bank of New York Mellon (BNY).

According to Moody’s, the issuer aims to maintain reserve coverage equal to 103% of liabilities for tokens in circulation. Qualified institutional holders can redeem RLUSD for dollars at par within two business days.

Moody’s also highlighted legal risks. Standard Custody does not have full legal separation from a potential bankruptcy process, and RLUSD holders do not yet have direct ownership rights to the reserve assets.

The agency expects the GENIUS Act, set to take effect in 2027, to strengthen protections for stablecoin holders. Reserves required under the legislation would be excluded from the issuer’s bankruptcy estate in the event of insolvency.

Moody’s warned that deterioration in collateral quality, a decline in reserve adequacy, or problems involving liquidity or redemptions could lead to a ratings review.

Ripple cites infrastructure review

Ripple senior vice president of stablecoins Jack McDonald called the decision an important validation of the quality of RLUSD’s infrastructure.

“RLUSD became the first stablecoin to receive an investment-grade rating from Moody’s,” a company representative said.

The company said Moody’s experts reviewed not only the composition of the reserves but also redemption mechanisms, custodial relationships, regulatory oversight, and operational processes.

National trust bank approval

Ripple Labs received final approval from the US Office of the Comptroller of the Currency on Oct. 26, 2026, to establish Ripple National Trust Bank.

The new entity will manage segregated RLUSD reserves, act as collateral trustee in the interests of holders, and provide digital asset custody services. Standard Custody will remain the stablecoin’s direct issuer under the supervision of the New York State Department of Financial Services.

Source: Incrypted