Ripple achieves success with RLUSD: Moody's gives high rating

Ripple has received significant recognition for its stablecoin RLUSD. Credit rating agency Moody's has given the digital currency high ratings, mainly thanks to its strong financial reserves.

That's good news for Ripple, which wants to make RLUSD more attractive to banks and other financial institutions.

Moody's announced Wednesday that RLUSD will receive an A2 assessment for the long term and P-1 for the short term. These are high scores that indicate low credit risk. In fact, P-1 is the highest short-term rating Moody's can give.

RLUSD is a stablecoin whose value is linked to the US dollar. One RLUSD should therefore remain worth about one dollar. Ripple has a financial reserve for this, so that users can exchange their coins for dollars.

That reserve mainly consists of cash and US government bonds with a short maturity. According to Moody's, these are relatively safe assets that can be quickly converted into money.

Ripple is also aiming for 103 percent coverage. This means that for every $100 in RLUSD spent, there should be about $103 in reserves. In doing so, the company maintains an additional financial buffer.

The way in which the money is protected also weighs in. The reserves are legally separated from other Ripple assets. This offers RLUSD holders extra protection if the company is in financial trouble.

Ripple has been trying to gain a foothold in the traditional financial world for some time. Recently, the company received final approval for Ripple National Trust Bank. Through this US trust bank, Ripple can store XRP and RLUSD for customers under federal supervision.

New US legislation can also help Ripple. The GENIUS Act should provide additional protection to stablecoin users from 2027, including through stricter rules on the reserves that issuers must hold.

Meanwhile, RLUSD is growing strongly. The stablecoin now has a market value of about 2.58 billion dollars, making it the seventh largest stablecoin according to CoinMarketCap.

The daily trading volume fell by more than 52 percent to 171 million dollars. In addition, RLUSD has almost 13,000 holders on the blockchain.

For XRP investors, the growth on the XRP Ledger is particularly interesting. As more businesses and consumers use RLUSD for payments, the number of transactions on the network may increase. Whether this will also lead to a higher XRP price is uncertain.