The California Department of Motor Vehicles (DMV) is testing the digitization of property titles and title transfers through a private Tezos blockchain.
The move is part of a collaboration between the California DMV, Tezos, and blockchain software firm Oxhead Alpha, which announced the success of the proof-of-concept on Jan. 25.
The California DMV has turned to Oxhead Alpha to build a private Tezos testnet that it has dubbed a “shadow ledger.” It is essentially designed to become a blockchain-based replica of the agency’s current database.
California DMV chief digital officer Ajay Gupta told Fortune on Jan. 26 that the agency expects to have the shadow ledger ready within the next three months.
From then on, it intends to launch applications such as digital wallets to keep and transfer NFT vehicle titles, with the DMV acting as an intermediary to oversee such operations.
“DMV’s perception of delay should change,” Gupta told Forbes.
Oxhead Alpha President Andrew Smith highlighted that the California DMV’s blockchain initiative will serve a wide range of use cases for the agency, particularly as it relates to modernizing its current paper-based systems.
Smith highlighted examples such as transaction fraud, in which car sellers hide key information about the condition of the vehicle in order to sell it to unsuspecting buyers.
Although defective vehicles have a special designation on their titles in California, Smith noted that sellers can move the car to another state and hide the defective designations relatively easily.
However, with the use of blockchain-based registries, and with other DMVs potentially adopting the technology as well, it would be much easier to digitally track the true history of vehicles, Smith suggested.
“As far as the benefit of having a persistent digital title, this is a very obvious use case,” he said.
Commenting on why Tezos was a good fit for the DMV, Smith outlined in the firm’s Jan. 25 announcement that the blockchain “solves some of the really hard problems in the blockchain in an elegant way.”
“The combination of responsible consensus, on-chain governance, and institutional-grade security makes Tezos a great platform for delivering production-ready solutions,” he said.
The California DMV move is likely to be followed by others in the state moving forward. In May 2022, California Governor Gavin Newsom signed an executive order to direct and explore opportunities for blockchain technology integrations with state government agencies.
“California is a global center for innovation, and we are setting the state up for success with this emerging technology, spurring responsible innovation, protecting consumers, and leveraging this technology for the public good,” the governor said.
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