The introduction of every new technology presents an opportunity to boldly gamble on a better future. New York Gov. DeWitt Clinton bet on the Erie Canal, then a technological and financial risk of epic proportions. Oregon instituted the first gas tax in 1919 — not to punish those who had taken up the creations of Winton and his competitors but to drastically scale up the state’s transportation network. Nevada will eventually earn a paragraph (hopefully several) for leading the effort to legally introduce autonomous vehicles onto our roads.
The process of spreading innovation has often come at tremendous costs, yet few would go so far as to say that Clinton should have abandoned his canal project or Winton should have stuck to making bikes. Artificial intelligence and blockchain are still awaiting their champions. These technological breakthroughs have the joint potential to transform how Americans live and flourish, how their governments operate, and how their communities function and thrive.
My hope is that a single state will dare to show the rest what this all could look like in practice, setting off a race to the future among its sister states. Here are four steps one pioneering state could take toward starting such a race:
Step 1: Establish an Office of Technology Adoption
People don’t trust what they’ve never used. “Build it and they will come” is only true if the public understands what you’re building and agrees that it’s a good idea. Yet many Americans profoundly distrust both AI and technologies related to blockchain.
That’s not surprising. People are bombarded with negative, unrepresentative headlines about these technologies. Two quick examples: First, just 1.9 percent of ChatGPT uses are for personal relationships, according to its parent company; a glance at the morning paper or legislative agendas, however, would suggest that this is one of the leading uses of generative AI tools. To ground AI regulation around such a misapprehension is poor public policy. A state Office of Technology Adoption (OTA) could expose more Americans to the myriad uses of AI that have nothing to do with developing what can become human-like relationships with users.
Second, while the blockchain intelligence company TRM reports that illicit actions make up just 0.4 percent of cryptocurrency transactions, crypto is only one of innumerable practical and efficient uses of blockchain. California, for example, has put 42 million car titles on blockchain to streamline vehicle transfers without the hassle of visiting the DMV. An OTA could gather and share these sorts of case studies. Picture an OTA competition in which students compete to develop explainer videos about stablecoins. These relatively light lifts could go a long way toward ensuring that people do not fear technology but rather understand how to harness it.
Step 2: Create a Regulatory Sandbox for Innovators
Startups are hungry for knowledgeable users to test their tools and join their networks. They will seek out the communities that lean into emerging technology, especially if a state designs a regulatory framework that fosters ongoing experimentation. This is a call for the creation of a broad regulatory sandbox for emerging technology companies.
This is not a regulatory-free zone but rather a testbed — allowing consumers, innovators and regulators to closely study what, if any, harms might arise from a product and, if such harms do exist, whether existing law provides sufficient remedies.
A generic sandbox — rather than one tied to a specific technology — would provide numerous benefits. It would ease administrative burdens and maximize the odds of transformative innovation: A sandbox open to different forms of technology could foster hybrid products and services, and it would attract a broader set of participants.
Participants should reach specific agreements with regulators for timely disclosure of key metrics, such as the number of users, their experiences and any incidents. Regulators should swiftly and transparently announce when and why a participant has been subject to any warnings or, if warranted, removal. This would help reduce concerns that the sandbox is a cover for unchecked experimentation by tech bros.
Step 3: Prove Utility With Public Pilots
Once a new technology has demonstrated its bona fides — its capacity to deliver public value without posing undue risk — the next logical step is for the state itself to become “the customer of first resort,” sponsoring and deploying targeted public pilots.
The state should establish a Public Technology Integration Fund — a grant program accessible to state agencies, cities and counties. For instance, a county clerk’s office could receive funding to pilot a blockchain-based land registry to dramatically reduce title-transfer times, or a state Department of Labor could integrate an AI assistant to streamline unemployment-claim processing and reduce fraud.
The key to the success of these public-facing pilots rests on their evaluation. Clear metrics of success — measured not only in cost savings but also in improved efficiency, fairness and citizen autonomy — must be established before deployment, along with easily accessible opportunities for community input, such as dedicated feedback portals and public forums.
Step 4: Rapidly Scale and Diffuse Proven Technologies
The typical life cycle of a successful government pilot is often one of lingering potential: It works well in a controlled setting, then fails to spread due to inertia, cost, and a simple lack of know-how in the broader public-sector and private economy. A forward-thinking state could actively combat this stagnation.
To facilitate widespread adoption, the state should create a Technology Diffusion Corps to aid small businesses, nonprofits and educational institutions in adopting and integrating the latest, proven tools from the sandboxes and public pilots. These experts would provide hands-on training, customized integration support and, most importantly, help organizations reorient their existing systems to maximize the benefits of the new technology.
The story of Alexander Winton and the automobile is a testament to the fact that progress is rarely linear and is often greeted with unearned skepticism. Yet the vision of a future powered by the judicious adoption of AI and blockchain is a compelling alternative to the paralysis of caution.
The steps outlined here address the core tension in modern technological governance: the balance between innovation and public protection. By structuring the adoption process as a series of iterative, transparent and publicly vetted steps, a pioneering state could transform the fear of unchecked experimentation into a confident, supervised evolution. It’s more than a matter of economic strategy — it’s best thought of as a declaration of optimism for the future of self-governance.
Kevin Frazier is the AI Innovation and Law Fellow in the University of Texas School of Law.
Governing's opinion columns reflect the views of their authors and not necessarily those of Governing's editors or management.
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