A couple of quick takeaways from watching the HFSC markups today around DAMS (now FIT ) and its prospects based on statements from today’s marathon House Financial Services Committee markup of digital asset bills (which is ongoing and voting scheduled for tonight).

(1) The Good: There has been some movement among Democrats with 5 Democrats coming out with statements of support at the hearing (Himes, Gottheimer, Nickel, Torres, Petersen). In particular, the statement from Himes was compelling and worth tuning into – he has pivoted his stance and come out strongly in favor – citing his significant engagement and opportunity to submit comments and have his concerns heard. 

TLDR: The movement here is a glimmer of hope that Democrats can join in genuinely bipartisan efforts and the division is less of a partisan issue than a division based on age.

(2) The Bad: The hold the SEC Chair has over Democrats is strong – many speeches given by Dems were clearly prepared talking points for representatives with low engagement on the bill (Rep. Beatty from Ohio whipped out a cell phone and read the talking points she was sent directly from there). Others engaged in bad faith mischaracterizations (Rep. Sherman – this bill allows Apple to tokenize its stock to avoid securities laws) and bombastic /dramatic statements with Rep. Lynch taking the cake with “I have been on this committee for 20 years and I can say unequivocally that this is the worst piece of legislation that has been presented for markup in 20 years”.

TLDR: we knew this was unlikely to pass the Senate but the odds arent looking great that it will pass the House (the Dems also presented 3 amendments).  Party lines are holding stronger than we had hoped. The HFSC is in recess until 7pm with voting scheduled tonight so we will see shortly how everything plays out… but even if it doesnt have the support to pass at this time, the draft bill can still (and likely will) form the basis of something that eventually passes.