Moody‘s, one of the leading credit rating agencies, assigned Ripple’s dollar-pegged stablecoin $RLUSD an A2 rating for long-term deposits and a P-1 rating for short-term deposits. This decision provides an important reference point for institutional investors in assessing stablecoin risks, with reserve structure and potential default scenarios also being considered.
$RLUSDs Reserve Structure Supports the Note!
According to The Defiant, the notes cover $RLUSD, which is issued directly on the XRP Ledger and Ethereum networks by Ripples subsidiary Standard Custody & Trust Company. Moodys viewed positively the fact that the reserves consist mainly of highly liquid assets such as short-term US Treasury bonds and cash.
Furthermore, $RLUSD‘s target of a 103% reserve coverage ratio was also considered in the rating and was evaluated positively. A large portion of the reserves are held under BNY’s custody services. Moodys also highlighted practices such as daily reserve verification, independent monthly accounting confirmations, and the burning of tokens prior to redemption.
