Moody's Rates Ripple RLUSD A2 as EU Approval Lags

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Moody’s Ratings assigned Ripple’s RLUSD stablecoin an A2 long-term rating and Prime-1 (P-1) short-term deposit rating on October 27, 2026, citing reserve quality, liquidity and redemption safeguards. The assessment comes as Ripple expands its US regulatory oversight, although RLUSD has not secured separate EU stablecoin authorisation.

The dollar-denominated token operates on the XRP Ledger and Ethereum. Standard Custody & Trust Company (SCTC), Ripple’s subsidiary supervised by the New York State Department of Financial Services (NYDFS), remains its issuer.

Ripple received final OCC approval for Ripple National Trust Bank, which is expected to manage RLUSD reserves. The company’s announcement confirms that the federally supervised institution can also act as collateral trustee for token holders and provide digital asset custody services.

Moody's Rates Ripple RLUSD A2 as EU Approval Lags — Moody’s rates Ripple’s RLUSD stablecoin A2/P-1 but it remains unauthorized in the EU until 2027.

Reserve Strength Supports Credit Ratings

According to Moody’s assessment, SCTC targets 103% reserve coverage, holding $103 in assets for every $100 of tokens outstanding. This provides a structural buffer against fluctuations in reserve value.

The portfolio consists of cash and short-duration US Treasury bills. Most assets are held with Bank of New York Mellon, rated Aa1, while cash deposits outside the primary custodian are limited to $50 million.

Eligible institutional participants can redeem tokens at par within two business days under the T+2 settlement framework. Retail holders, however, remain exposed to secondary-market price fluctuations, and RLUSD does not carry FDIC deposit insurance.

Bankruptcy Protections Remain a Concern

Moody’s capped the long-term rating because SCTC is not a bankruptcy-remote special-purpose vehicle.

Token holders lack direct legal ownership of underlying reserves, potentially delaying redemptions during insolvency proceedings despite the assets supporting RLUSD.

The distinction matters because high-quality collateral does not eliminate legal risks associated with the issuer’s bankruptcy.

What to Watch Next

The 2027 GENIUS Act implementation is expected to strengthen statutory protections by excluding qualifying stablecoin reserves from an issuer’s bankruptcy estate. Stronger statutory reserve protections could support a future rating upgrade, subject to Moody’s assessment. Separately, RLUSD’s EU market position depends on satisfying applicable MiCA requirements for the token, beyond Ripple’s existing European service authorisations.