defi ·
Moody's Rates Ripple's $2.6B RLUSD Stablecoin A2 After OCC Bank Approval
Moody's Ratings assigned an A2 long-term deposit grade and a P-1 short-term deposit grade to Ripple USD (RLUSD). This dollar-backed stablecoin is issued by Ripple's Standard Custody & Trust Company.
The ratings reflect the quality of RLUSD's reserves. These reserves are primarily held in Treasury bills, cash, and other short-term U.S. government assets, much of it kept with custodian BNY.
The agency noted that RLUSD reserves are mostly Treasury-heavy. However, Moody's also pointed out that current holders do not possess direct ownership in these reserves.
This rating followed the final OCC approval granted to Ripple National Trust Bank. This entity will manage the reserves and function as the collateral trustee for RLUSD.
RLUSD, which debuted in December 2024 across Ethereum and the XRP Ledger, holds a market capitalization near $2.6 billion. This represents a minor portion of the estimated $300 billion stablecoin market.
Moody's also mentioned limitations regarding holder protection. Standard Custody is not a bankruptcy-remote entity, though the GENIUS Act, set for 2027, will exempt required reserves from an issuer's insolvency proceedings.
The issuance of RLUSD remains under supervision from the New York Department of Financial Services, alongside federal oversight, following the OCC's approval.
Financial institutions like Standard Chartered have engaged with RLUSD. Standard Chartered's Dubai branch began offering institutional custody, exploring a "collateral mirroring" arrangement with Ripple and LMAX Group.
This development underscores the increasing institutional focus on regulated digital assets. The involvement of major financial players and the formal rating process signal a maturation toward enterprise adoption within the decentralized finance ecosystem.
Why it matters
The institutional adoption of RLUSD is gaining traction, backed by major financial players like Standard Chartered and Mastercard. The rating signals increased regulatory confidence, which is crucial for DeFi protocols seeking stable, compliant settlement layers. Readers should watch how the GENIUS Act impacts reserve protection moving forward.
