How and why is this motor vehicles’ department driving blockchain?

Paper is slow; paper can be stolen or lost; paper is easy to forge. But there’s more to blockchain.

A lot has been augured, hoped for, and dissected about blockchain’s use in a public sector entity. So, when someone as huge and legacy-anchored as the United States Department of Motor Vehicles (DMV) uses blockchain, it’s like steering a heavy vehicle in a new terrain – untrodden and unmapped. But it could also mean a new, faster, and better way that no one has discovered yet. We navigate some signposts of this new road with Will Treves, Chief Operating Officer of Cario (a venture that describes itself as a transparent and secure network that enables the digitisation of car titles for radically quicker, cheaper, and safer automotive transactions). Will’s earlier stints include names like IAC Inc., PlayStation and Atari. Here, he tells us what it takes to park a public sector giant in the shiny new spot called blockchain. Especially when it’s about the DMVs, automotive, and title companies.

The company – as you explained earlier- is at the forefront of blockchain's emergence in America’s Department of Motor Vehicles (DMVs), automotive, and title companies. What's Cario's approach to blockchain? How is it distinctive from what others are doing?

Cario is revolutionising the car title itself and the platform to transfer it. To achieve this, we’re taking a hybrid approach to building a network solution based on blockchain technology. We use both a private blockchain ledger (Corda) and a public blockchain ledger (Polygon). 

How? Can you open the bonnet a bit?

Corda serves as the private blockchain for our automotive business network. This includes dealerships, commercial lenders, DMVs, consumers, insurance companies, salvage companies, and more. Anyone who is a stakeholder in the car titling process will have access to the Corda ledger and be able to attest to transactions to which they are a party. Importantly the private blockchain ledger ensures data privacy and selective sharing capabilities, so only parties to the transaction can see that transaction on their ledger. 

Once a transaction has been completed on the private Corda blockchain, we mint an NFT to the Polygon public blockchain ledger, so that the owner of the title has a public immutable record of their title. This is a key differentiator for us as most e-titling solutions—even those based on blockchain—use only a private ledger and never create a public blockchain asset.

Speak to any regular car owner and you are likely to hear a paper title horror story: “The time I lost my title.”  “The time I signed my title in the wrong place and spent six weeks waiting for a new one.”  “The time I bought a car with a fake title.”  And businesses hate the paper title also. 

How does this change everything for car owners and the regulators?

Why are we doing this? For most people, their car is the most valuable asset they own after their house. And yet it’s strange to think that in 2023, the only thing that proves vehicle ownership is a piece of paper: the physical car title.  Paper is slow; paper can be stolen or lost; paper is easy to forge. And for businesses, paper titles are slow, inefficient, and vulnerable to fraud.  

Speak to any regular car owner and you are likely to hear a paper title horror story: “The time I lost my title.”  “The time I signed my title in the wrong place and spent six weeks waiting for a new one.”  “The time I bought a car with a fake title.”  And businesses hate the paper title also.  Consider that today multi-billion-dollar banks still house physical vaults stocked with tens of thousands of paper titles for vehicles for which they’ve issued a loan.  These titles need to be managed, processed, and kept secure by teams of human beings.  Not to mention the large online dealerships who have been threatened with, and in some cases banned, from doing business in certain states in the USA due to title delays on vehicles that they have sold.

So at Cario, we use distributed ledgers to enable the conversion of the car title into a digital token on a blockchain. Ownership privileges can now be conveyed and exchanged through a decentralised digital platform, with digital tokens serving as the representations of tangible assets.

Which of the Blockchain's core advantages work the strongest for civic entities and utilities—transparency, authenticity, trust, real-time updates, or immutability?

For us, the most important advantage of technology is dynamic and high-fidelity transparency. Since a transfer-of-ownership transaction is highly complex, strong network coordination (i.e., coordination of all the disparate stakeholders) is a key requirement. By utilising a real-time, provenance, and dynamically transparent data structure (the blockchain), we can remove data silos in the network and ensure that the right parties have the right access to key data at the right time. The selective data-sharing capabilities of the private blockchain (discussed above) is a key capability here to ensure privacy while providing unprecedented transparency.

Does the 'anonymity' part pose a problem? Also, 'immutability'—especially in case of fines or tickets—something people might not want to have around permanently? Or something that can be exploited when mixed with bias?

Immutability is also important—this gives the stakeholders a high degree of trust in the data and workflows they are presented with. 

Also important is the ability of local civic entities to maintain local autonomy in their titling solution. A local jurisdiction retains ownership, authority, and privacy over its data at all times. (In a country like the United States, where there are 51 jurisdictions each managing their title infrastructure, this is essential.)

As for fines and tickets, today we are focused purely on solving the problems associated with paper-based vehicle ownership. Fines or tickets are not something we currently have under the scope of our solution.

Would a solution like this work in a highly legacy-dominated and paper-heavy department—like in countries like India? What would you advise an Indian PSU or government enterprise that is considering blockchain?

It’s not only India that is paper-heavy! There are 51 Departments of Motor Vehicles in the United States, and each one varies wildly in their dependence upon paper. But the digitisation of paper-based transactions in general has a strong history and a stronger future. For example, brokers physically exchanged paper stock certificates for centuries, until electronic/book entry systems replaced stock certificates in the 1990s. Or paper currencies themselves: over 30 countries are migrating to central bank digital currencies, with Sweden’s e-Krona only a couple of years from its planned rollout. And we’ve designed our platform with the future in mind, not just the present. A tokenised car title guarantees utility and relevance well into the future.

It’s not only India that is paper-heavy!  There are 51 Departments of Motor Vehicles in the United States, and each one varies wildly in their dependence upon paper. 

Forking and hacking have come up a lot in the last two years—is blockchain as secure as it was originally meant to be?

Yes. Cario utilises a hybrid public-private blockchain architecture to ensure security, immutability, and trust while not compromising the privacy of business-sensitive information.  And in our analysis, alternative technologies like centralised databases are no more secure. Less so.

Moreover, it’s important to point out that private blockchain networks, such as the Corda framework we are using, are not prone to forks in the way public blockchain networks are. This is a key difference like the consensus algorithm and the inherent ability to craft the network to the business use case.

How do you ensure against fears like—lost titles, higher carbon footprint, fake decentralisation (With central power still in someone's hands), impersonation of identities, disputed transactions, etc.?

Each of the fears you mention above is so different that it’s hard to give a holistic answer. But as mentioned before, the real-world deployment of blockchain technologies to power systems like sovereign currencies proves that these challenges are addressable.

Can we pragmatically look at zero-party data markets?

It’s a good question, but at Cario, we are very focused on building a robust solution for digital vehicle titling. So we are not currently in a position to comment on zero-party data marketing with any authority.

What made DMVs choose this? Any prep work before deployment? Any tangible outcomes that you can talk about?

The advantages of Cario for DMVs are wide-ranging, and our partners recognise that. Efficiency, security, happiness of end consumers. Also, features we are building into the Cario platform the essential advantage to DMVs of cradle-to-grave digital process coverage: Cario supports the vehicle administration process digitally from its inception point, from the first vehicle sale, through normal ownership changes during the vehicle’s life with titling and registration being 100 percent digital, to the vehicle’s end-state, when it requires a salvage title for its final disposition (parted out or crushed). All these transactions are 100 percent digital, supporting all market participants, and take place through the Cario application.

While we are having fruitful planning discussions with multiple DMVs, government agencies like to be extremely conservative with announcements and information sharing, so forgive me for being unable to share specifics today.

Any other enterprises that are using your solution—anything you can share about that?

While DMVs are a major beneficiary of our technology, the suite has equal utility to the business network. For example, the Cario platform allows any party (dealer, lender, or even a consumer with multiple cars, etc.) to digitise their existing title inventory at scale. Our bulk upload function—backed by sophisticated OCR and NLP capabilities—can redefine title management for these entities overnight.

This translates into vastly improved operational efficiencies for businesses in the form of better title management systems for businesses, and a significantly better experience for their customers. Which bank wouldn’t want to allow their customers to access their title on any device, at any time?

Any observations on India's digital identity system 'UIDAI Aadhaar'? And the upcoming digital currency?

At Cario we are very focused on building a robust solution for digital vehicle titling in the United States… for now! So candidly we are not able to comment on India’s initiative just because we don’t have enough familiarity with it to speak with any confidence on the topic.

What's happening next—anything exciting on the way?

We’re constantly optimising the Cario product. The roadmap is too long and granular to share here, but we’re constantly adding integrations with other software systems, improving our training material, refining our integration plans with partners, and making the platform easier and more flexible to use for the many stakeholders in the automotive industry.

WILL Treves, COO, Cario

By Pratima H

pratimah@cybermedia.co.in