Moody's granted an investment-grade rating to Ripple's RLUSD on October 27, and Ripple announced it publicly on October 28, making RLUSD the first stablecoin in history to receive such a rating.
This milestone came just one day after Ripple obtained final authorization from the U.S. Office of the Comptroller of the Currency (OCC) for a national trust bank, signaling a deep integration of traditional financial regulation and crypto asset issuance.
The issuer plans to maintain reserve coverage at 103%, and although Moody's explicitly noted potential bankruptcy risks in its assessment, the rating still establishes a relatively low level of credit risk and lays the groundwork for large-scale institutional adoption.
According to data compiled by Woofun AI, Moody's assigned an A2 long-term deposit rating and a P-1 short-term deposit rating. This rating applies directly to the stablecoin issued by Ripple's New York-registered trust company, Standard Custody & Trust Company (SCTC), on the XRP Ledger and the Ethereum network. The rating followed the OCC's final authorization of Ripple's national trust bank on October 26, which was approved to manage RLUSD reserves and serve as collateral custodian, while SCTC retained its role as issuer. A2 sits in the upper-middle range of Moody's rating scale, indicating relatively low credit risk, while P-1 is its highest short-term rating, reflecting an extremely strong capacity to meet short-term debt obligations.
Jack McDonald, Ripple's Senior Vice President of Stablecoin Business, emphasized in a statement posted on X on October 28 that RLUSD is the first stablecoin ever to receive an investment-grade rating from Moody's.
RLUSD launched in December 2024 and currently has a market capitalization of approximately $2.6 billion. Notably, independent rating agency Bluechip had assigned RLUSD an A rating and ranked it first under its own framework in July 2025, but Moody's assessment carries greater traditional financial authority. By contrast, earlier in October 2026, Moody's assigned only a B3 long-term counterparty risk rating to the entity formerly known as Sky (previously MakerDAO), covering both the USDS and DAI stablecoins, which was viewed as speculative-grade debt with higher credit risk. At the time, Moody's evaluated Sky as a whole rather than singling out an individual stablecoin, a sharp contrast to the path RLUSD took in obtaining a standalone investment-grade rating.
Regarding reserve composition and safety mechanisms, Moody's noted that SCTC plans to maintain reserve assets at 103% of RLUSD's debt obligations, a ratio above the minimum rating requirement. The backing reserves are mainly composed of highly liquid, short-term U.S. government assets and cash, most of which is held at Bank of New York Mellon (BNY.US). In addition, cash held at other depository institutions is capped at $50 million, with another $50 million in Treasury securities separately custodied by Bank of New York Mellon.
On October 27, Ripple and Bank of New York Mellon announced an expansion of the latter's custody services for XRP and RLUSD assets, offering support to institutional clients. Eligible institutions can redeem RLUSD at a $1 par value with a T+2 settlement cycle, or two business days. At the operational level, multiple security measures have been adopted, including pre-issuance funding, token burning before redemption, daily reconciliation, multi-signature controls, and independent smart contract reviews, supplemented by monthly third-party audit reports.
With the rating in place, RLUSD's adoption is expanding rapidly: Robinhood (HOOD.US) plans to integrate RLUSD into its app later in 2026, and Ripple announced on October 28 that users can access RLUSD through Coinbase (COIN.US) Prime, the Coinbase exchange, and the Coinbase retail app, with the Coinbase global exchange also set to support the stablecoin thereafter.
Despite the high rating, Moody's still warned that bankruptcy risks facing the issuer could affect the timely redemption of RLUSD. Bankruptcy injunctions typically suspend collection and enforcement actions, leading to payment delays. Although segregated reserve storage reduces risk, SCTC is not a special-purpose entity that can effectively isolate bankruptcy risk, and holders do not have direct ownership of the assets. Moody's believes that stronger legal protections would help support a rating upgrade, and expects that once the GENIUS Act takes effect in 2027, it will further strengthen holder protection by excluding the issuer's statutory reserves from the bankruptcy estate.
Meanwhile, research commissioned by Ripple and conducted by BCG estimates that regional banks with $200 billion to $300 billion in assets could gain $80 million to $100 million in additional profit by offering digital asset services and custody, further confirming the business logic of traditional banks improving financial performance through crypto custody operations.
RLUSD's rating breakthrough is not merely a technological victory but also a signal of a maturing regulatory framework, indicating that the stablecoin industry is moving from decentralized experimentation toward regulated mainstream financial infrastructure.
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