Moody's gives Ripple's RLUSD stablecoin investment-grade ratings

what happened

Moody's Ratings has assigned Ripple's dollar-pegged stablecoin RLUSD an A2 long-term deposit rating and a P-1 short-term rating. Both are investment-grade, according to The Block's report on the agency's statement.

Moody's based the A2 grade on the credit quality and market value of the reserve, its coverage, liquidity and redemption arrangements, along with the separation of reserves and their custody with third parties. Most of the reserve sits in short-dated U.S. government assets and cash, and the issuer targets 103% coverage, above the minimum tied to the rating. Most assets are held at The Bank of New York Mellon, which Moody's rates Aa1.

Moody's also cited the GENIUS Act, which takes effect in January 2027 and is meant to better protect reserves and token holders, including keeping required reserves out of an issuer's bankruptcy estate. Jack McDonald, Ripple's senior vice president of stablecoins, called the rating a "massive validation" and said RLUSD is the first stablecoin Moody's has rated investment-grade. Earlier this week, Ripple received final approval from the OCC to launch Ripple National Trust Bank. RLUSD, launched in December 2024, has a market capitalization of $2.5 billion.

why it matters

A rating at this level could make the stablecoin easier for institutional clients to use, which matters for its role in Ripple's payment infrastructure and as collateral in Ripple Prime. Ripple says the token is mainly used within those products, so demand may depend heavily on their growth.

market impact

RLUSD and Ripple ecosystem: higher trust in the stablecoin's reserves may support interest in the token

tags

instruments