California DMV to digitize vehicle title management system via Tezos

The California Department of Motor Vehicles (DMV) is testing the digitization of car titles and title transfers via a private Tezos blockchain.

The move is part of a collaboration between the California DMV, Tezos and blockchain software firm Oxhead Alpha, with the latter announcing a successful proof-of-concept on January 25.

The California DMV has tapped Oxhead Alpha to build on a private Tezos testnet that it has dubbed a “shadow book.” It is essentially designed to be a blockchain-based replication of the agency’s current database.

California DMV’s Chief Digital Officer Ajay Gupta told Fortune on January 26 that the agency wants to have the shadow book published within the next three months.

Following that, it appears to be rolling out applications such as digital wallets to hold and transfer non-functional token car titles, with the DMV acting as an intermediary to oversee such operations.

“DMV’s perception of lagging should definitely change,” Gupta told Forbes.

Oxhead Alpha’s president, Andrew Smith, outlined that the California DMV’s blockchain initiative will serve a wide range of use cases for the agency, particularly regarding the modernization of its current paper-based systems.

Smith highlighted examples of transaction fraud, where car sellers hide key information about a vehicle’s condition in order to load a dud or “lemon” on unsuspecting buyers.

While defective vehicles have a special designation on their California titles, Smith noted that sellers can move the car to another state and hide the erroneous designations with relative ease.

But with blockchain-based record-keeping and other DMVs potentially adopting the technology, Smith suggested it would be much easier to track the actual history of vehicles digitally.

“In terms of 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 blockchain “solves some of the really hard problems in blockchain in an elegant way.”

“The combination of responsible consensus, chain governance and institutional security makes Tezos a great platform to deliver production-ready solutions,” he said.

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The move by the California DMV is likely to be followed by others in the state going forward. In May 2022, California Governor Gavin Newsom signed an executive order to lead and explore opportunities for blockchain tech integrations with state governments.

“California is a global hub for innovation, and we’re setting the state up to succeed with this new technology — spurring responsible innovation, protecting consumers, and leveraging this technology for the public good,” the governor said.