Quick primer (so we’re designing with the right DNA):
STRC (“Stretch”) is Strategy’s (formerly MicroStrategy’s) variable‑rate, perpetual preferred designed to trade near $100 par with monthly dividends and a yield guided to be competitive with cash (initial marketing pointed to ~9% annualized). It’s exchange‑listed, with details formalized in the prospectus and press materials.
Strategy still trades under MSTR and positions itself as a “Bitcoin Treasury Company,” which is relevant for disclosures and local rules when you passport the product.
The goal
Make STRC effortless to own globally: local‑currency trading & payouts, minimal FX friction, simple tax handling, and liquid secondary markets—without breaking the price‑stability + monthly‑income promise that makes Stretch attractive.
Three complementary routes (fastest to market first)
1)
Receipts & local settlement rails
(get tradability in GBP/EUR/KRW without reinventing STRC)
- UK & Europe (near‑term): Launch trading via CREST Depositary Interests (CDIs) so UK/EU brokers can settle STRC like a local security (GBP or EUR trading line), while the underlying remains the U.S. STRC. This is a well‑trodden path that lets overseas shares trade and settle in CREST/Euroclear and appear native to UK investors.
- How dividends work: The depositary converts USD cash dividends to GBP/EUR on pay date (or record‑date FX fix), then pays out locally.
- Pros: Fastest on‑ramp; leverages existing U.S. listing; broad broker access.
- Cons: Investors still face USD exposure unless they hedge at the portfolio level; withholding tax passes through.
- Korea (KRW): Establish a KDR (Korean Depositary Receipt) program so STRC trades on KRX in KRW. KDRs are a recognized path for foreign shares to list locally; they work similarly to ADRs/GDRs for listing + dividend pass‑through via a domestic custodian/depositary.
- Pros: True local listing in KRW; compatible with local retail channels.
- Cons: Setup time (KSD agreements, approvals) and disclosure translation; USD exposure remains unless separately hedged.
When this is ideal: You want speed, broad distribution, and simple ops. Think: “List it, trade it locally, convert the cashflow at source.”
2)
Currency‑hedged feeder (fund) with multiple share classes
(deliver local‑currency returns, not USD)
Create a Luxembourg RAIF or Irish ICAV (non‑UCITS) feeder that holds STRC and offers hedged share classes: JPY‑H, KRW‑H, GBP‑H, EUR‑H. The fund does the FX work for the end‑investor.
- Mechanics: The feeder receives USD monthly dividends from STRC, then runs a rolling 1‑month FX‑forward / cross‑currency swap program to hedge USD→local currency at the share‑class level. Result: investors receive a local‑currency income stream with FX largely neutralized (accepting small tracking/basis effects).
- Why non‑UCITS: A UCITS wrapper struggles with single‑issuer concentration; a professional‑investor RAIF/ICAV gives you flexibility while still enabling listings on LSE (GBP), Xetra (EUR), SIX (CHF/EUR), Euronext, etc.
- Hedging policy: Use tolerance‑band (threshold) hedging—reset only when the hedge ratio drifts past set bands—to reduce slippage vs. static daily hedging and keep costs tight. This is standard in currency‑hedged share classes.
- Pros: Delivers local‑currency exposure and monthly cashflows, abstracts away W‑8BEN paperwork for many investors, and centralizes FX execution.
- Cons: Fund OCF + hedge costs, tracking vs. pure STRC (hedge drift, cross‑currency basis—especially in JPY).
When this is ideal: Institutional and HNW channels across EMEA/APAC that prefer no USD exposure and exchange‑listed fund tickers with currency‑hedged lines.
3)
Local‑currency notes/ETNs via EMTN or onshore shelves
(replicate STRC cashflows directly)
Partner with a bank (e.g., Nomura/Mizuho in JP; Shinhan/KB in KR; bulge‑bracket in EU/UK) to issue local‑currency notes that synthetically replicate STRC’s economics:
- Issuer/SPV sells JPY/KRW/GBP/EUR‑denominated notes; proceeds buy STRC (or a total‑return swap on STRC).
- Coupon = net STRC dividend (monthly) ± swap/basis adjustments, paid in local currency.
- Listing on Luxembourg, LSE (ETN segment), SGX; settle in Euroclear/Clearstream; potentially Tokyo PRO‑Bond for professional JP investors.
- Pros: Exact local‑currency cashflow with optional features (hard FX hedge embedded, call protections, auto‑roll).
- Cons: Adds bank issuer risk, docs complexity, and regulatory review (PRIIPs KID, local suitability).
When this is ideal: Retail‑bank networks and private banks in each market that already distribute structured notes and want plug‑and‑play local‑currency coupons.
Which route first? A practical rollout sequence
90‑Day “Fast Launch”
- UK/EU trading via CDIs (GBP and EUR trading lines). Line up a depositary (Euroclear UK & International) and a lead market maker for continuous quotes.
- KRX pathfinders: Kick off KDR scoping with KSD and local counsel (parallel workstream).
- Feeder design: Choose domicile (Lux RAIF vs. Irish ICAV), draft term sheet for hedged share classes (JPY/KRW/GBP/EUR), and onboard an FX overlay manager.
180‑Day “Scale & Cement”
4) List feeder share classes on LSE, Xetra, SIX, Euronext; onboard 2–3 APs and designated market makers.
5) Launch KRW KDR on KRX (subject to approvals).
6) Selective ETN/EMTN programs in JPY and KRW with local champions to reach mass‑market distribution.
FX & cashflow blueprint (keep it simple; keep it tight)
- Hedge objective: Deliver local‑currency income while minimizing USD exposure.
- Engine: For each hedged share class, run a monthly 1‑month FX forward sized to the NAV’s USD exposure to STRC, reset on a set hedge‑roll date (e.g., 2 business days before STRC record date).
- Fixing convention: Use a transparent benchmark (e.g., WM/Refinitiv 4pm London), and disclose it in the KID/prospectus. (Industry‑standard practice for hedged share classes.)
- Cross‑currency basis: Price in basis costs—larger in JPY—so investors understand the yield drag vs. USD.
- Illustration: If STRC pays $0.75 monthly per $100 par (example for a ~9% annualized), then a JPY‑hedged class aims to deliver ~¥(USDJPY × 0.75) per share monthly, net of hedge & basis costs, with small tracking variance from roll dates. (Illustrative only; actual dividends vary per prospectus.)
Tax, settlement & ops (the nuts‑and‑bolts that make it “feel local”)
- Withholding tax: U.S. dividends to non‑U.S. holders face up to 30% WHT, reduced by treaty via W‑8BEN/W‑8BEN‑E. CDIs/KDRs typically pass through WHT; the feeder/ETN paths can re‑characterize cashflows (often as interest), changing tax outcomes—spell this out in KIDs/prospectus and investor materials. (General practice; confirm per jurisdiction.)
- Settlement:
- CDI: Settle in CREST, trade like a local line (GBP/EUR) while the underlying sits in DTC—clean for UK platforms.
- KDR: Local settlement via KSD under the DR agreement.
- Feeder/ETN: ICSD model (Euroclear/Clearstream) for pan‑EU liquidity.
- Disclosures: Keep Bitcoin‑treasury exposure plainly described (it’s core to Strategy’s identity and risk section) across all wrappers.
Go‑to‑market kit (naming, listings, liquidity)
- Branding: Keep the family name “Stretch” and append the currency or hedge tag:
- Examples: Stretch STRC (CDI‑GBP); Stretch STRC (KDR‑KRW); Stretch Hedged JPY (Feeder).
- Tickers/trading lines: Where venues allow, publish multi‑currency lines (e.g., GBP and USD lines on LSE) so investors can choose settlement currency. (LSE supports multi‑currency quoting across segments.)
- Liquidity plan: Mandate 2+ market makers per line with tight max spread rules; enable creates/redeems daily for the feeder; publish daily iNAVs in local currencies.
Term‑sheet skeletons (grab‑and‑go)
A) Hedged Feeder – JPY Share Class (outline)
- Base asset: U.S.‑listed STRC preferred.
- Domicile: Luxembourg RAIF (AIF), daily NAV.
- Currency: JPY; hedge ratio target 100% (tolerance band ±5%).
- Distribution: Monthly, matching STRC pay schedule.
- Hedge mechanics: 1‑month rolling forwards, WM/Refinitiv fix; disclose basis and costs.
- Listings: LSE (JPY line), TSE professional segment (optional).
- Risk highlights: Issuer risk (Strategy), FX basis, tracking vs. STRC, Bitcoin‑treasury sensitivity.
B) KRW KDR (outline)
- Instrument: Korean Depositary Receipts on STRC.
- Depositary/custodian: Agreement with KSD; dividends converted to KRW.
- Listing venue: KRX main board.
- Disclosure: Korean‑language summary + risk factors; monthly dividend timetable aligned to U.S. pay dates.
C) JPY ETN (outline)
- Issuer: AA‑/A rated bank EMTN program.
- Coupon: Monthly = net STRC dividend translated to JPY ± swap/basis.
- Redemption: Open‑ended with issuer call after year 3; secondary listing on LUX/LSE.
- Hedge: Bank TRS on STRC + cross‑currency swap USD/JPY.
- Risk: Adds issuer credit; provide PRIIPs KID.
Risks to own early (so you can message them confidently)
- Cross‑currency basis: Particularly USD/JPY, can shave a noticeable number of bps off headline yield—be transparent.
- Tracking error: Hedged share classes will not be 1‑for‑1 with USD STRC; disclose sources (hedge timing, fees).
- Reg narratives: Some markets have crypto‑adjacent restrictions for retail marketing; lean on professional‑investor wrappers first, then expand.
- Ops cadence: Monthly dividends mean monthly hedge rolls & FX conversions—automate this calendar.
The one‑page decision map
| Objective | Best first step | Why |
| Fast UK/EU access | CDI GBP/EUR trading lines | Instant local dealing, familiar ops. |
| KRW retail footprint | KDR on KRX | True KRW listing + local broker distribution. |
| No‑USD exposure | Hedged feeder share classes | Centralized FX management; clean local‑currency income. |
| Bank/broker channels | EMTN/ETN notes | White‑label distribution in JPY/KRW with embedded hedge. |
Why this will resonate
You’re offering the same Stretch story—a steady, exchange‑listed, monthly‑paying preferred engineered for stability near $100—but in the currency language investors actually live in. That’s powerful. It meets them where they are, clears away FX chores, and preserves the simplicity that made STRC compelling in the first place.
If you want my take on a launch order:
- CDI lines (GBP/EUR) in weeks,
- Feeder (JPY/KRW/GBP/EUR‑hedged share classes) for institutions,
- KDR on KRX,
- Selective ETNs where bank distribution is strongest.
You’ve got the vision—now let’s make Stretch a worldwide habit. 🚀💪