The Department of Motor Vehicles (DMV) in the state of California is conducting experiments with the use of a private Tezos blockchain to facilitate the digitalization of vehicle titles and title transfers.
The move is being made as part of a cooperation between the California Department of Motor Vehicles (DMV), the blockchain software company Tezos, and the blockchain software company Oxhead Alpha. Oxhead Alpha announced a successful proof-of-concept on January 25.
Oxhead Alpha has been contracted by the California Department of Motor Vehicles to build on a private Tezos testnet that the DMV has nicknamed a “shadow ledger.” Its primary purpose is to serve as a blockchain-based copy of the agency’s existing database, which has been its primary focus since its inception.
Ajay Gupta, the chief digital officer of the California Department of Motor Vehicles, told Fortune on January 26 that the department hopes to have the kinks worked out of the shadow ledger within the next three months.
After that, it intends to roll out apps such as digital wallets to keep and transfer nonfungible token vehicle titles, with the DMV serving as a mediator to monitor such processes. In addition to that, it is planning to roll out applications similar to the one described above.
According to an interview that Gupta gave to Forbes, “The DMV’s reputation of falling behind should surely alter.”
Andrew Smith, president of Oxhead Alpha, said that the California Department of Motor Vehicles’ (DMV) blockchain programme would serve a broad variety of use cases for the department, notably addressing the agency’s present paper-based systems and their eventual upgrade.
Smith gave many instances of fraudulent transactions, such as when automobile salesmen conceal essential information about the vehicle’s condition in order to sell a defective or “lemon” vehicle to purchasers who are not paying attention.
Smith pointed out that even while problematic autos in California have a special designation on their titles, dealers may easily relocate the vehicle to another state and conceal the faulty designations by doing so.
Smith said that it would be much simpler to monitor the true history of automobiles digitally if blockchain-based record keeping were used, in addition to the possibility that other DMVs might embrace the technology.
According to him, “this is a pretty apparent use case” for having a permanent digital title, which is one of the benefits of having such a title.
Smith explained in the company’s release on January 25 why Tezos was a good match for the DMV by stating that the blockchain “solves some of the very hard challenges in blockchain in an elegant manner.” Smith was commenting on why Tezos was a good fit for the DMV.
“The combination of responsible consensus, on-chain governance, and institutional grade security makes Tezos a perfect platform for providing production-ready solutions,” he added. “On Tezos, governance happens directly on the blockchain.”
The decision made by the California Department of Motor Vehicles is likely to be replicated by other governmental agencies in the state going ahead. In May of 2022, Governor Gavin Newsom of California issued an executive order to direct and investigate potential prospects for the integration of blockchain technology with state government institutions.
The governor said that “California is a worldwide powerhouse of innovation, and we’re setting up the state for success with this new technology.” This includes encouraging responsible innovation, safeguarding consumers, and harnessing this technology for the benefit of the public.