The first state-level fintech “sandbox” in the U.S. was awarded to a couple of students who hope to make Arizona a proving ground for their blockchain-powered mobile payments company.

Om Cash co-founders Jordan Karstadt, 22, and Sahil Sachdev, 24, are taking a break from classes at Massachusetts Institute of Technology and New York University to prove the viability of blockchain technology to foster faster, cheaper payments within the closed environment of luxury resorts. If all goes well under Arizona’s regulatory...