Ajay Gupta, the California DMV’s chief digital officer, underlined that the department aims to upgrade its current processes and increase transparency in auto title transfers. The California DMV is experimenting with using a private Tezos blockchain to digitize automobile titles and title transfers.

The move is part of a cooperation between the California Department of Motor Vehicles, Tezos, and blockchain software developer Oxhead Alpha. Which announced a successful proof-of-concept on Jan. 25.

The California DMV has hired Oxhead Alpha to create a secret Tezos testnet known as a “shadow ledger.” It is primarily intended to be a blockchain-based replication of the agency’s current database.

California DMV Future

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.

It intends to launch apps such as digital wallets for holding and transferring nonfungible token vehicle titles, with the DMV serving as a mediator to monitor such processes.

“The DMV’s stigma of being behind the times should surely alter,” Gupta told Forbes.

Andrew Smith, president of Oxhead Alpha, explained that the California DMV’s blockchain effort would serve a wide range of use cases for the agency. Particularly in terms of modernizing its current paper-based processes.

Smith cited examples of transaction fraud in which car vendors conceal critical information about the vehicle’s condition in order to sell a dud or “lemon” to naive purchasers.

While problematic autos have a specific classification on their titles in California, Smith pointed out that dealers may easily shift the car to another state and conceal the flawed labels.

California DMV and Blockchain

However, Smith believes that with blockchain-based record keeping and other DMVs potentially adopting the technology, it will be much easier to monitor the true history of cars digitally.

“As far as the value of having a lasting digital title is concerned, this is a pretty apparent use case,” he explained.

Smith explained in the firm’s Jan. 25 statement why Tezos was a good fit for the DMV. Saying that the blockchain “solves some of the very challenging challenges in blockchain in an elegant way.”

“The combination of responsible consensus, on-chain governance, and institutional grade security makes Tezos an excellent platform for providing production-ready solutions,” he explained.

Conclusion

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 prospects for blockchain technology interfaces with state government organizations.