How do you handle the situation where the actual owner of the assets loses his private keys?

[marv-engine]

Posed by Judith (from a question she was asked):
So the bank issue 10,000 EURCoin in echange for 10,000 EUR on its issuer bank account. Holder of 10,000 EURCoin loses his private key.

Then 10,000 EUR is locked on the bank account and cannot be spent anymore as it was linked to the lost EURCoin assets.

E-Money issuers usually solve this with some kind of timeouts. At Sziget Festival in Budapest they use NFC cards for people to pay their drinks etc. If you don’t use up your credits (don’t move them) for a year, then they expire and they go back to the issuer. This isn’t necessarily the best way to do it, but this problem must be dealt with somehow.
What would be the answer to this question?

[dexX7]

Use escrow/multisig with one emergency key. Or in combination with a trusted third party - see https://api.trustedcoin.com/ as example for such a provider. trustedcoin.com is probably not applicable here, but was intended to show what can be done in theory, if there is a third party such as a bank involved.

Would that help?

Edit: the underlying idea: the user creates an escrow wallet (address starting with 3) which requires 1-of-2 keys to spend coins. One of those keys is stored in a secure place for the case he loses the other one. This can be expanded to 2-of-3 or 1-of-3 and combined with a third party which also stores a key as backup (e.g. the bank).