California Blockchain Bookkeeping: DMV Adopts Blockchain Efficiency | Harris Beach PLLC

Digitally progressive California has achieved a new technological first, bringing blockchain to the California Department of Motor Vehicles in a quest for a better, faster and cheaper administrative process for the state’s motor vehicle record keeping.

California’s DMV, which has the highest number of car registrations in the US, is teaming up with Oxhead Alpha, a crypto infrastructure and software development company, to use Tezo’s blockchain technology to verify car titles and registrations. Paper car titles will become digital assets on a private DMV-powered blockchain, enabling streamlined title transfers.

A proof-of-concept testnet was established in late January, running DMV validator nodes. A testnet allows the blockchain to be tested without risking real funds or the main chain. The DMV expects to create a shadow book that mirrors the current driver’s license database within three months, a first step toward full deployment and consumer-facing applications, such as digital wallets.

Andrew Smith, president of Oxhead Alpha, said Tezo’s blockchain technology was chosen for its institutional security, sophisticated governance model and energy-efficient consensus algorithm.

“Tezos solves some of the really hard problems in blockchain in an elegant way,” he said. “The combination of responsible consensus, on-chain governance and institutional security makes Tezos a great platform to deliver production-ready solutions.”

If you block it, will they come?

California has a long history of establishing meaningful legal and statutory sea changes across the country, and the introduction of blockchain registration at an institution as relevant as the DMV therefore has the potential to initiate a nationwide shift in state blockchain adoption. California created a task force back in 2018 to study how state governments and state businesses could use the technology: Among the recommendations in the group’s 2020 report to the California legislature was a DMV pilot.

The state has also instructed county records offices to allow the use of blockchain technology with birth, death and marriage records.

Last May, California Governor Gavin Newsom issued an Executive Order establishing it as the first state in the nation to begin creating a “comprehensive and harmonized” framework for blockchain technology and cryptocurrency, with the goal of “solidifying California’s status as the premier the global location for responsible crypto-asset companies to start and grow.”

California, particularly Silicon Valley, has been a hotspot for blockchain and cryptocurrency since the early days of the industry. At one point, nearly 23% of the nearly 800 blockchain companies based in North America were headquartered in California—by far the most of any jurisdiction.

The state’s pioneering ways, including a proliferation of cryptocurrency ATMs, led website Crypto Head to name it the most crypto-ready jurisdiction in the US in 2021.