Indiana Just Asked the Smartest Question in Government Blockchain

The State of Indiana recently did something rare in government: it admitted it doesn't have all the answers.

RFI 26-86904 was issued by the Indiana Department of Administration on behalf of six state agencies, the Secretary of State, FSSA, DWD, DCS, IOT, and the BMV. That makes it one of the most coordinated, multi-agency explorations of blockchain technology I've seen come out of any state government. The objective, per House Enrolled Act 1322, is to understand how blockchain and distributed ledger technology might enhance efficiency, security, and customer experience in state government operations. It's a wide mandate, intentionally so.

Indiana isn't pre-selecting a solution. They're asking the market to show them what's possible, and then they may decide to move forward with an RFP to act on it. It's basically a public research project where they get a number of possibilities with a potentially significant upside if the state chooses to conduct a financial technology overhaul. It's not exactly free consulting, but it’ll help them get closer to understanding the what, why, and how for potentially implementing blockchain technology.

Why This Approach Is Actually Brilliant

Most blockchain initiatives at the state level start with a conclusion - we want a Bitcoin reserve, or we want a state-issued token, and work backward from there. Indiana started with a genuine question. That intellectual humility is a breath of fresh air in government procurement, and it has the potential to produce really great results.

The RFI is structured around two core questions: can this technology save the state capital, and can it create better experiences for residents? I'm inclined to think those are the right questions, and likely where this technology can help. One other area I'd add is the fully unknown unknown - new user experiences that are internet money/blockchain native, but that's a whole can of worms so I'll avoid going there.

It also means Indiana isn't betting its credibility on a single vendor or a single architecture. The RFI invites responses across any state agency, on any use case, from any respondent who has something substantive to contribute. The innovation comes to them, for free, and the state learns from the full range of responses before committing to anything. That's a smart posture toward procurement.

The Problem Worth Solving: Payments

Every additional dollar a state spends on payment processing, reconciliation, fraud remediation, and interagency transfers is a dollar not going to roads, schools, or public services. I’m of the opinion that saving money is imperative for states, especially if you can provide the same existing services with less, or do a whole lot more with the same.

The use case I find most compelling, and the one we focused on at Wave Digital Assets RFI response, is upgrading state payment rails via blockchains using stablecoins.

Indiana moves billions of dollars a year through agencies like FSSA, DWD, and DCS before a single dollar ever reaches a resident. That money travels on the legacy payments architecture: ACH batch transfers, paper checks, prepaid card programs managed by third-party vendors. It works. But it's slow, closed during business hours, expensive, and layered with intermediaries collecting fees at every hop. The efficiencies we modeled are based on current interagency transfer volumes, and that's before you account for the downstream benefits to residents who currently wait days for funds.

Stablecoins offer one of the biggest innovations in money movement that we've seen in decades, the ability to move funds globally, directly to the end user, inexpensively. For years it lacked the sophisticated infrastructure to scale for governments and enterprises, but now that infrastructure is here and being implemented. We've already seen global banking and remittance players in the private sector lean heavily into this technology, proving out the value case.

Instead of routing a benefit payment through a bank (potentially a correspondent bank), a card processor, a network, and a settlement window, you send a digital dollar directly to a citizen's wallet. Instantly, at a fraction of the cost. The intermediaries that collect fees at every hop in the current system largely disappear. 

The Western Union CEO put it plainly at a recent Digital Asset Summit: stablecoins create a better value proposition for the organization and its customers. By enabling real-time, 24/7 settlement using their own stablecoin, the company can convert from a 'negative float' business to a 'positive float' model, freeing up significant capital, all while offering end users prepaid stablecoin-backed cards that can act as sudo-bank accounts. What works for international remittances works for domestic benefit distribution too. A DWD unemployment claimant waiting three days for an ACH transfer, or worse, waiting two weeks for a check, is experiencing exactly the same friction. This is just one of many examples where states should start to consider stablecoins.

Layer On, Don't Rip and Replace

Here's the thing about government: its really difficult to just flip a switch and migrate to new payment rails overnight. PeopleSoft, CoreMMIS, INTIME, the Way2Go card program, these systems aren't going anywhere, and they shouldn't be. They work. They have constant uptime requirements. The thing about any major tech upgrade is that it's really hard to rip and replace, and much easier to layer on new solutions.

Our response focused on how stablecoin rails could integrate with Indiana's existing payment infrastructure rather than replace it, a distinction that matters enormously in a government context. When considering a modular stack, fiat on-ramps, mature orchestration layers, banking partners, and multi-channel off-ramps are the general structure we recommended.

The research we did centered on understanding how modern stablecoin platforms actually interface with legacy systems, what that looks like operationally, and where the real efficiency gains live. That work reinforced a core conviction: the most credible proposals in this space are grounded in how government actually operates today, not how it might operate in an ideal world. I think a lot of this industry has scared away the public sector by promising too much, and in reality we should focus on the basics. Stablecoins are the starting point.

The framing matters. "Replace your payment infrastructure with blockchain" is a hard sell. "Reduce your per-transaction cost on benefit disbursements and eliminate ACH delays for citizens" is a concrete problem with a concrete solution.

Every State Should Be Watching

Government procurement has a well-documented pattern: one state proves the model, and others follow. Being second is safer than being first, but only the first mover gets to shape what "standard" looks like. Indiana is positioning to be that first mover for a blockchain technology overhaul in state government. Whether or not that’s stablecoin related is still to be determined.

They're not alone in paying attention to the space at the State level though…

Wyoming launched FRNT, the Frontier Stable Token, the first and only state-issued stablecoin in the U.S., earlier this year. In a pilot preceding the public launch, FRNT reduced vendor payment times from 45 days to just seconds. Wyoming is now exploring paying state contracts and making payments for unclaimed property via the token, and sees it as a potential vehicle for rapid aid disbursement in natural disasters. The reserve yield goes to Wyoming's School Foundation Fund, a public policy dividend built directly into the token's design. A very clever solution.

Colorado's experiment with crypto tax payments went the other direction. The state accepted Bitcoin and other volatile assets starting in 2022, collected only about $57,000, and absorbed meaningful conversion costs in the process. The lesson wasn't that crypto doesn't belong in government. It was that volatility doesn't belong in government finance. A dollar-pegged stablecoin is a fundamentally different instrument than Bitcoin. Colorado's experience actually strengthens the stablecoin case by showing exactly where the line is. As a Colorado resident, I wouldn’t consider paying for my taxes in shares of Apple, let alone Bitcoin. I’ll chalk this one up as experimental, but it's shown very little success. As a resident I’d welcome the opportunity to talk with anyone in the Treasurers or Governers office about using stablecoins.

Texas has taken a different track, pursuing a Bitcoin reserve at the state level, a strategic asset hold rather than a payment infrastructure play. It's a bet on appreciation, not a modernization of how the state moves money. It's a signal to the world, “We’re a crypto friendly state, and we’re putting our money where our mouth is”. Directionally interesting, operationally different from what Indiana is exploring.

The pattern across all three is the same: states are interested in crypto and blockchain, legislatures are paying attention, and the question has shifted from "is this real?" to "how do we do this right for our residents?"

Indiana's RFI is the most operationally serious version of that question I've seen, with a very open mind toward it.

The Window Is Open

The combination of the GENIUS Act providing federal legal clarity, Wyoming demonstrating a working production deployment, and an administration in Washington that is openly pro-digital asset innovation has created the most favorable environment for state-level stablecoin adoption that has ever existed. The barriers in place years ago, regulatory uncertainty, no production-grade infrastructure, no regulatory precedent - no longer exist. The rules and tools are here.

What remains is the implementation question, and that's a governance and procurement challenge, not a technology challenge. The technology is ready. The legal framework is solidifying. What's needed now is state leadership willing to ask Indiana's question: not "should we do this?" but "how do we get experiments going, run a successful pilot, implement this correctly for our residents, on our timeline, within our fiscal constraints?"

I encourage more states to issue RFIs like this one. Not as a performance of innovation, but as a genuine procurement tool, a way to map the landscape, identify the real use cases presented by the brightest minds in the industry, and build the institutional knowledge needed to move from curiosity to implementation.

Indiana has shown the model. The next state just has to be willing to ask.

Whether you are from a state or government office or simply interested in learning more about stablecoins, I would be happy to connect and discuss how stablecoins can benefit your operations.

Any economic forecasts in this commentary are merely opinion, and any referenced performance data is historical. Past performance is no guarantee of future results. All investment involves risk of loss. Views and opinions expressed herein are of an individual nature and indicative of information as of the dates provided.