Moody’s Assigns Ripple’s RLUSD A2 Long-Term, P-1 Short-Term Ratings

Moody’s has assigned Ripple’s dollar-backed stablecoin RLUSD an A2 long-term deposit rating and a P-1 short-term deposit rating.

The Defiant reported on October 28 that Moody’s announced the ratings on October 27. The ratings apply to RLUSD issued by Ripple on the XRP Ledger and Ethereum.

An A2 rating falls in the upper-medium grade category and indicates low credit risk. P-1 is Moody’s highest short-term rating.

Moody’s said RLUSD’s reserves consist mainly of highly liquid short-term US Treasuries and cash. RLUSD targets a 103% reserve coverage ratio. Most reserve assets are held in custody by BNY.

Institutional clients that meet redemption requirements and complete registration can receive par value within two business days of submitting a redemption request. Moody’s cited token burning before redemption payments, daily reserve verification and independent monthly accounting attestations as factors supporting the ratings.

Moody’s added that, although the reserves are segregated from the issuer’s proprietary assets, the structure does not fully insulate RLUSD from the effects of an issuer bankruptcy. RLUSD holders do not have a direct ownership claim on the reserves, meaning redemptions could take longer than two business days if bankruptcy proceedings begin.

Moody’s said stronger legal safeguards could support an upgrade. By contrast, deterioration in reserve asset quality or coverage, weaker redemption capacity, or a major operational or cybersecurity incident could lead to a downgrade.