Ajay Gupta, the California DMV’s chief digital officer, emphasized that the agency is looking to modernize its current systems and increase transparency in car title transfers.
The California Department of Motor Vehicles (DMV) is experimenting with using a private Tezos blockchain to digitize car titles and title transfers.
The move is part of a collaboration between the California Department of Motor Vehicles, Tezos, and the blockchain software firm Oxhead Alpha, which announced a successful proof-of-concept on Jan. 25.
The California DMV has hired Oxhead Alpha to create a private Tezos testnet known as a “shadow ledger.” It is primarily intended to serve as a blockchain-based replication of the agency’s current database.
Ajay Gupta, the California DMV’s chief digital officer, told Fortune on Jan. 26 that the agency hopes to have the shadow ledger in place within the next three months.
Following that, it intends to launch applications such as digital wallets to store and transfer NFT car titles, with the DMV acting as a middleman to oversee such operations.
“The DMV’s perception of being behind the times should definitely change,” Gupta told Forbes.
The California DMV’s blockchain initiative will serve a wide range of use cases for the agency, particularly in terms of modernizing its current paper-based systems.
Smith used transaction fraud as an example. In this type of fraud, car sellers hide important information about the car’s condition so they can sell a “lemon” to buyers who don’t know what’s going on.
While faulty vehicles have a special designation on their titles in California, Smith pointed out that sellers can easily move the car to another state and conceal the faulty designations.
However, Smith suggested that with the use of blockchain-based record keeping, and with other DMVs potentially adopting the technology as well, it would be much easier to digitally track the actual history of vehicles.
“As far as the benefit of having a persistent digital title is concerned, this is a very obvious use case,” he explained.
Smith explained in the firm’s Jan. 25 announcement why Tezos was a good fit for the DMV, saying that the blockchain “solves some of the really hard problems in blockchain in an elegant way.”
“The combination of responsible consensus, on-chain governance, and institutional grade security makes Tezos an excellent platform for delivering production-ready solutions,” he explained.
The California DMV’s decision is likely to be followed by others in the state in the future. California Governor Gavin Newsom signed an executive order in May 2022 to direct and investigate opportunities for blockchain technology integrations with state government agencies.
“California is a global innovation hub, and we’re positioning the state for success with this emerging technology by encouraging responsible innovation, protecting consumers, and leveraging this technology for the public good,” said Gov. Brown.
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