Moody's rates Ripple's RLUSD stablecoin A2 as Coinbase opens trading

Moody's Ratings assigned A2 long-term and P-1 short-term deposit ratings to Ripple USD (RLUSD), Ripple's U.S. dollar stablecoin, the credit rating agency said in a rating action dated Oct. 27. The next day, Ripple and Coinbase announced that U.S. retail and institutional clients could start trading RLUSD. Both announcements came within two days of Ripple receiving final approval for a national trust bank from the U.S. Office of the Comptroller of the Currency (OCC) on Oct. 26.

A2 is the sixth notch from the top of Moody's long-term scale and sits within investment grade. P-1 is the highest short-term rating. Moody's said the P-1 rating is aligned with the A2 long-term rating.

Most of the reserve sits with BNY

RLUSD is issued by Standard Custody & Trust Company, LLC (SCTC), a wholly owned subsidiary of Ripple Labs. Moody's said the rating reflects the credit quality and market value of the reserve assets, reserve coverage, liquidity and redemption arrangements, segregation of the reserve, and operational, technological, legal and regulatory factors.

According to Moody's, the reserve is predominantly invested in short-duration U.S. government assets and cash, and most of it is held with custodian The Bank of New York Mellon (BNY), which Moody's rates Aa1(cr). Cash held at a non-custodian depository institution is capped at $50 million, backed by the same amount of short-term Treasury bills kept in a separate, segregated BNY account. SCTC targets 103% reserve coverage, which Moody's said exceeds the minimum level associated with the rating.

Redemption is available to eligible, onboarded institutional holders. SCTC must redeem at par within two full business days of receiving a compliant redemption order. Moody's added that SCTC runs weekly liquidity stress tests and receives independent monthly CPA attestations.

Rating covers only native RLUSD on XRPL and Ethereum

Moody's said the rating applies solely to RLUSD natively issued by SCTC on the XRP Ledger and Ethereum. It also flagged weaknesses: SCTC is not a bankruptcy-remote special-purpose entity, and RLUSD holders do not have a direct ownership interest in the reserve. If SCTC went bankrupt, an automatic stay could push redemptions beyond two business days, Moody's said.

Moody's said reserve segregation and oversight by the New York State Department of Financial Services (NYDFS) mitigate those risks. It said the GENIUS Act, the U.S. stablecoin law taking effect in 2027, will add statutory protections, including excluding required reserves from an issuer's bankruptcy estate. The ratings could be cut if reserve quality or coverage weakens, a custodian with materially weaker credit quality is added, or significant operational, technology or cybersecurity failures impair minting, burning or timely redemption, Moody's said.

One-to-one conversion in the Coinbase app

Starting Oct. 28, clients can trade and manage RLUSD on Coinbase Prime, Coinbase Exchange and the Coinbase Retail app, with 1:1 conversion from U.S. dollars and other supported dollar stablecoins. Deposits and withdrawals are supported on the XRP Ledger, Base and Ethereum. Ripple said it will provide liquidity to support RLUSD on Base, Coinbase's blockchain. Availability for Coinbase Global Exchange customers, including using RLUSD as collateral, will follow, the companies said.

"Institutional appetite for compliant, high-quality stablecoins is clear. The challenge is making them readily available through the platforms institutions already trust and use."

Jack McDonald, SVP of Stablecoins at Ripple

Brett Tejpaul, co-CEO of Coinbase Institutional, said adding RLUSD is another step toward the "everything exchange," one venue where clients choose the assets that fit their strategy. Ripple said RLUSD, launched in December 2024, has surpassed $2.4 billion in market capitalization.

RLUSD trades at 1,343 won on Upbit

In South Korea, RLUSD is listed on Upbit's Korean won market. As of 10:35 p.m. KST on Oct. 28, it traded at 1,343 won on Upbit and 1,341 won on Bithumb, while Tether (USDT) traded at 1,341 won on Upbit. The Binance price converted to won was about 1,329 won, putting Upbit roughly 1.1% higher, a gap known as the kimchi premium (the difference between prices on Korean exchanges and global markets). Upbit's 24-hour RLUSD trading value was only about 13.58 million won. XRP traded at 1,769 won on Upbit and $1.318 on Binance at the same time.