Far from its less-than-official beginnings, blockchain has evolved into something much bigger and more widely useful than simple cryptocurrency trading.
Those potential uses, opportunities and pitfalls were part of a three-part hearing held by the California State Treasurer’s Office June 22 that included testimony from academics as well as public-sector and financial experts.
Perhaps one of the most practical and publicized applications for digital ledger technology comes from the California Department of Motor Vehicles (DMV), which has been eyeing it to facilitate smooth peer-to-peer vehicle title transfers while also reducing fraud in the space, said DMV Chief Digital Transformation Officer Ajay Gupta.
The traditional title transfer processes are prone to fraud, especially where out-of-state transactions are concerned, and leave something to be desired in their simplicity. Gupta called it a “distasteful process.”
One area where Gupta sees growing need and opportunity is de-risking interstate transfers and sharing accurate data between agencies like his own.
“There has been some work done in the industry to create some centralized verification across the states, but in general, it remains a field that’s open to quite a bit of fraud,” Gupta said.
The DMV has been working with the American Association of Motor Vehicle Administrators to create such a system.
Non-fungible tokens (NFTs) are also useful for the DMV as what Gupta called a “digital twin” for paper titles. They contain all of the pertinent records information without disclosing personally identifiable information.
Brynly Llyr, deputy commissioner with the California Department of Financial Protection and Innovation, noted that many states have or are working on providing oversight and licensing in this space, especially as a means of cutting down on scams and fraud.
Llyr said that in 2025 alone, more than $2 billion was lost to illicit schemes that might have been stopped if intermediaries were in place to question transactions.
Beginning July 1, businesses acting as custody providers or operating exchanges, stablecoin issuance or crypto kiosks will need to obtain licenses to continue doing business here.
Ted Lambert, division chief for the State Controller’s Office, addressed the challenges the technology poses for digital unclaimed property. New legislation, SB 822, went into effect Jan. 1, 2026, and adds some necessary guidance around how digital assets escheat to the state.
“There are challenges that are just natural because this really hasn’t been done before at a state level,” Lambert said. “We’re trying to do everything right, we’re trying to put everything in place, but there are things we’re working through.”
The office believes there are roughly 1 million unique assets, worth an estimated $600 million, that could be sent to the state, where it would be held for 18 to 20 months before it could be converted to U.S. dollars and added to the General Fund.
The holding of these assets is something the Controller’s Office wants to bring on a third party to manage.
“It’s not something the state is trying to do ourselves. That would be an extreme undertaking with security issues and everything along those lines,” Lambert said.
The office is working through what those workflows could look like as well as prepare for the anticipated influx of claims surrounding digital assets.
The hearing also included an overview of the technology from practitioners and its interaction with the traditional banking and financial systems.
The full hearing can be viewed here.
Blockchain, Crypto Eyed as Growing Need in State Government
A deep bench of experts provided a look at the use cases and growing need around the technology during a State Treasurer's Office hearing Monday morning.
