The Department of Motor Vehicles in California plans to use blockchain technology for record keeping, including the issuance of car ownership and simplifying transfers of such ownership.
The DMV has tapped a private fork of the Tezos blockchain, an open-source blockchain that can execute peer-to-peer transactions and serve as a platform for deploying smart contracts, according to a recent report by Fortune.
The move is part of a collaboration between the California DMV, Tezos and blockchain software firm Oxhead Alpha, which announced the successful completion of a proof-of-concept blockchain-based vehicle titling solution on January 25.
Ajay Gupta, the chief digital officer at the California DMV, said he hopes the plans to materialize the title database on blockchain come to fruition in the next three months. Following that, the agency also aims to build consumer-facing applications, including digital wallets that hold car title NFTs.
“The DMV’s perception of lagging behind should definitely change,” Gupta reportedly said.
While there are numerous applications for blockchains, which maintain a decentralized and secure record of data, car titles are one possible option. A startup out of Cleveland raised $5 million in 2020 to digitize car titles, and the state of California published a report the same year identifying possible pilots for blockchain, with the DMV included as one of the options.
Gupta mentioned that they initially started working on the project back in 2020, but had to suspend work due to the pandemic. However, he said plans to use digital ledgers for generating and transferring car titles is an opportunity for the agency to modernize its processes.
Andrew Smith, the president of Oxhead Alpha, also mentioned that leveraging blockchain technology could help address issues like transaction fraud and tracing the cars’ movement.
Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. One of the biggest advantages of blockchain is that it can guarantee the fidelity and security of data records.
As reported, US Congressman French Hill said he plans to promote a progressive regulatory framework for digital assets in order to make sure “America is the place for innovation in fintech and blockchain.”
In a report earlier this month, the World Economic Forum (WEF) said it believes blockchain technology will continue to be an “integral” part of the modern economy. The organization highlighted the widespread applications of cryptography and blockchain technologies, adding that their use in the financial services sector is already notable.
“Indeed, as a test of the staying power of digital assets and blockchains at the core of financial services (and other areas of the global economy), watch what the big banks and mature financial services firms do, not what they say.”