Moody’s Gives Ripple’s RLUSD A2 and P-1 Ratings

Moody’s assigned Ripple’s RLUSD stablecoin an A2 long-term deposit rating and a P-1 short-term deposit rating, giving the token a formal credit assessment as Ripple expands its banking arrangements around the product. The ratings apply to RLUSD, which is issued by Ripple subsidiary Standard Custody Trust Company on the XRP Ledger and Ethereum. A2 is an investment-grade rating on Moody’s long-term scale, while P-1 is the agency’s highest short-term rating. The ratings were requested by the issuer, according to Moody’s. Moody’s said RLUSD’s reserves consist mainly of short-term U.S. government assets and cash, with most held by BNY as custodian. The agency described a target reserve coverage of 103% of tokens in circulation. It also said eligible institutional holders can redeem RLUSD at par within two business days. The assessment includes limits on holder protections. Moody’s noted that Standard Custody is not bankruptcy-remote and that holders do not have direct ownership of the reserves. The rating is a credit assessment, not a guarantee of redemption, a stable dollar peg or institutional adoption. Ripple said the Office of the Comptroller of the Currency gave final approval...