Utah CIO Mike Hussey had an aha! moment when he went to the state’s Division of Motor Vehicles to register a vehicle with his son. The experience led Hussey to push for the state to adopt a new blockchain solution.
“We’re always trying to make the citizens’ lives easier as they engage the state,” he tells Government Technology.
Recently, Hussey says, his son purchased a car. The only reason they had to go into a state facility was to transfer the title from the seller to his son. “I thought, ‘There’s got to be a better way of doing this with better technology,’” Hussey says.
Utah Wants to Use Blockchain to Cut Costs, Improve Services
Blockchain had “matured a little bit more” to a point where the state was confident in the digital ledger technology, Hussey says. With blockchain, no central authority is required to authorize, verify or approve a transaction. Instead, blockchain serves as “a shared, global, incorruptible and therefore trusted ledger of economic transactions. It is controlled equally by all who wish to participate and transparent, yet private,” according to a 2017 National Association of State Chief Information Officers report.
The Beehive State is looking to create a blockchain platform “that will allow us to move our vehicle titles onto blockchain,” so that the buyer, seller, banks and insurance companies involved can all digitally complete the transaction during a title change.
“So, we’re seeing an opportunity there to make citizens’ lives easier, to make use of some great emerging technology,” Hussey says.
Most people associate blockchain with bitcoin or other cryptocurrencies, Hussey tells Government Technology. However, those are just digital assets representing money that can be transferred from one individual to another. Very similarly, Hussey says, a vehicle title is an asset that can be transferred from one person to another.
The state expects to save money by introducing blockchain technology to this process, Hussey says. “I’ve heard from some banks that they don’t actually store the titles,” he says. “The minute they get the title, because they’ve made a loan on that vehicle, they shred them, and then when the loan has been satisfied, they request another title from the state and send it back to the individual.”
The existing process costs all involved “a lot of money” Hussey notes, and he expects blockchain will help with streamlining. “I think we can do a little better job on some emergent technologies like blockchain,” he adds.
“So, we’re seeing a lot of opportunity ahead,” Hussey says. “We’ve been engaging some companies, and I think you’ll see some great things in the very near future from Utah.”
States Pursue Numerous Blockchain Use Cases
According to the NASCIO report, 63 percent of those surveyed were still investigating blockchain in state government through informal discussions, 26 percent said there were no discussions of blockchain at that time and 5 percent had adopted blockchain technology in support of some state government services.
There are numerous blockchain technology use cases, and many state governments are pursuing blockchain initiatives. In 2018, a total of 18 states introduced some form of legislation related to blockchain technology and nine bills became law, according to a tally from the National Conference of State Legislatures.
For example, Colorado’s Department of State is now required to consider research, development and implementation for encryption and data integrity techniques, including distributed ledger technologies such as blockchain. A law in Tennessee now recognizes the legal authority to use blockchain technology and smart contracts in conducting electronic transactions.
And a Wyoming law authorizes corporations to use electronic networks or databases for the creation or maintenance of corporate records.
The NASCIO report notes that early applications of blockchain technology are “circumstances involving audit; audit trail; necessary record of information lineage; multiple systems or databases that must be reconciled due to recording errors; managing physical or digital assets; managing ownership; managing contracts or agreements involving many secondary parties.”
Blockchain can be used by state and local government agencies to encode and confirm or transfer property; in the transfer of currency, stock, private equity, bonds and derivatives; to facilitate crowdfunding; to manage the lineage of land titles, vehicle registries, business licenses, passports, voter IDs, death certificates and proof of insurance; to manage and execute contracts, signatures, wills, trusts and escrows; and to serve as a secure way to provide physical asset keys that manage access to homes, hotel rooms, rental cars or private cars.