California Leads the Way as U.S. Federal, State Agencies Consider Blockchain’s Applications

The California Department of Motor Vehicles (DMV) tokenization project is an example of how companies and U.S. state and federal agencies are using blockchain-based solutions to drive efficiencies and lower costs, Bank of America (BAC) said in a research report Thursday.

The department plans to revolutionize its vehicle title and transfer management system by tokenizing the more than 14 million automobiles registered in the state. It will issue vehicle titles as non-fungible-tokens (NFTs) with ownership recorded on a private version of the Tezos blockchain. NFTs are digital assets that represent ownership of virtual or physical items that can be sold or traded.

“Tokenization of vehicle titles could also enable fractionalized vehicle ownership, allow holders to pledge vehicle-title NFTs as collateral in the real world or within decentralized finance (DeFi) protocols and increase liquidity on vehicle marketplaces,” analysts Alkesh Shah and Andrew Moss wrote.