The document discusses using a UART (Universal Asynchronous Receiver/Transmitter) as a state machine. The UART top module contains receiver and transmitter modules. The baud rate is 1200 Hz, so the transmitter clock is 1200 Hz while the receiver clock is 16 times faster at 19200 Hz to allow for 8 samples per received bit to reduce errors. The UART implements the transmitter and receiver functions as state machines.