It doesn't. If you really need a blockchain, an old-school permissioned one will do the job cheaper, more reliable, and, paradoxically, often even in more decentralized fashion. NFTs don't bring anything to the table, other than being a cute and wasteful collectible card equivalent that's perfect for money washing and scamming clueless people.

> crypto more broadly

Think about all of the licensing, money printing, and registration agencies to ever exist. What percentage of them have significant corruption? Blockchains provides a lot of stability in a way more traditional human organizations fail to.

At the end of the day, the vehicle registration agency still needs to issue the license, so what's the benefit of a blockchain here? You do not need a blockchain to, say, cryptographically sign something such that it can be verified as a genuine item. And blockchain won't stop corrupt minting of licenses by the agency. And even if you did need a blockchain, the ledger wouldn't be public because the data on it is private. So now it's just a database with a ton of extra steps, complexity and kneecapped performance.