Strategy has introduced a new Digital Credit Capital Framework that allows the company to sell Bitcoin for reserve building, preferred dividend payments, interest expenses, and security repurchases while raising the STRC annual dividend rate to 12%.
The company said the framework is designed to strengthen its preferred securities, improve liquidity, preserve long-term Bitcoin exposure, and support shareholder value. The plan comes after renewed pressure on Strategy’s capital structure, STRC’s discount to par, and concerns over the company’s cash reserve coverage.
Michael Saylor, Strategy’s founder and executive chairman, said the company remains committed to Bitcoin as its main treasury reserve asset. He added that “Digital Credit requires liquidity, discipline, and active capital management.”
Strategy Raises USD Reserve to $2.55B
Strategy said its USD Reserve stood at about $2.55 billion as of June 28, including expected proceeds from shares sold through its at-the-market program that had not yet settled by that date.
Under the new Board-approved reserve policy, Strategy said the USD Reserve may only be used to pay preferred stock dividends and interest on outstanding debt. Any other use will require Board approval. Strategy shares rose after the announcement, with MSTR trading at $86.38, up 4.94% in premarket trading
Source: CoinCodex
The company said its current annual expected preferred dividend payments and interest expense total about $1.76 billion. Based on that figure, the $2.55 billion reserve provides about 17.4 months of coverage.
Strategy’s Board also set a minimum reserve policy equal to at least 12 months of expected preferred dividend and interest expenses. Any drop below that level will require Board authorization.
STRC Dividend Rate Increased to 12%
Strategy raised the annual dividend rate on its Variable Rate Series A Perpetual Stretch Preferred Stock, or STRC, to 12.00%. The change applies to semi-monthly periods with record dates on or after July 1, 2026.
The company said its corporate objective is for STRC to trade over time between about $99 and $100, near its $100 stated amount. It also warned that STRC may trade outside that range, including at much lower prices.
Saylor said Strategy will evaluate the STRC dividend rate each month. The company will consider STRC trading levels, market yields, credit spreads, Bitcoin price volatility, reserve coverage, and capital market conditions.
The company said it will not automatically raise the STRC dividend only because STRC trades below its stated amount. Dividends remain subject to Board approval and are not guaranteed.
Strategy Authorizes $2B in Buybacks
Strategy also approved up to $1 billion in repurchases of its Digital Credit Securities, including STRC, STRF, STRD, and STRK. The company said STRC will likely be the initial focus if management finds repurchases accretive.
The company also approved a separate $1 billion repurchase program for its class A common stock, MSTR. Repurchases may occur through open-market buys, block trades, private deals, tender offers, exchange offers, or other legal methods.
Strategy said repurchases will not be funded from the USD Reserve. If the company uses Bitcoin sales for buybacks, those sales will fall under the new BTC Monetization Program.
CEO Phong Le said Strategy is “evolving from one-way capital issuance to active capital management.” He said the company intends to issue securities when capital is attractive and buy back securities when market prices make repurchases accretive.
Bitcoin Monetization Program Adds Reserve Flexibility
Strategy’s Board authorized a BTC Monetization Program that allows the company to sell Bitcoin for three main purposes. These include raising it to $1.25 billion for the USD Reserve, funding preferred dividends and interest expenses, and financing repurchases of Digital Credit Securities or MSTR.
The program does not require Strategy to sell any Bitcoin. The company said any BTC sales will depend on market conditions, liquidity needs, tax matters, accounting treatment, legal rules, and management’s view of long-term shareholder value.
Chief Financial Officer Andrew Kang said, “Bitcoin is capital,” adding that the program gives Strategy flexibility to use part of its BTC reserve to support Digital Credit and fund accretive repurchases when BTC sales are more attractive than issuing common equity.
With the $2.55 billion USD Reserve and $1.25 billion of Board-authorized reserve-building BTC monetization capacity, Strategy said it has about $3.80 billion in current preferred dividend liquidity coverage. That equals about 25.9 months of expected dividend and interest coverage before future changes, taxes, fees, market conditions, or repurchases.
