defi ·
Moody's Rates Ripple's $2.6B RLUSD Stablecoin A2, a Day After OCC Bank Approval
On Tuesday, Moody's Ratings assigned an A2 long-term deposit rating and a P-1 short-term deposit rating to Ripple USD (RLUSD).
This dollar-backed stablecoin is issued by Ripple's Standard Custody & Trust Company. The agency stated these ratings reflect the quality of RLUSD's reserves. These reserves are primarily held in Treasury bills, other short-term U.S. government assets, and cash, with most assets held by custodian BNY.
Moody's noted that RLUSD's reserves are heavily weighted toward Treasury assets. Furthermore, the agency observed that holders currently possess no direct ownership interest in these reserves.
The ratings were requested by the issuer. This development occurred one day after Ripple secured final approval from the Office of the Comptroller of the Currency for Ripple National Trust Bank. This bank will oversee RLUSD's reserves and function as their collateral trustee.
RLUSD, which launched in December 2024 on Ethereum and the XRP Ledger, currently holds a market capitalization of approximately $2.6 billion, per CoinGecko.
Moody's also pointed out deficiencies in holder protection. Specifically, Standard Custody is not a bankruptcy-remote entity, and RLUSD holders lack direct ownership in the reserves. However, the agency mentioned that the GENIUS Act, the U.S. stablecoin law set for 2027, will exempt required reserves from an issuer's bankruptcy estate.
RLUSD will remain issued by Standard Custody under oversight from the New York Department of Financial Services, subjecting the stablecoin to both federal and state supervision.
Earlier this month, Standard Chartered began offering institutional custody for RLUSD via its Dubai branch. They mentioned collaborating with Ripple and LMAX Group on a "collateral mirroring" arrangement, allowing clients to use the stablecoin as trading collateral without removing it from the bank's books.
Earlier coverage
Reported by Decrypt.
