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Every day, consumers give out their credit card or bank account numbers to strangers whom they trust to take out the correct amount and safeguard their sensitive information. "That's terrifying if you really step back and think about it," says Jeremy Allaire of Circle Internet Financial.

"Cold storage" of cryptographic private keys, private theft insurance, and audited full reserves can prevent another Mt. Gox-like debacle, says Jeremy Allaire, the CEO of Bitcoin startup Circle Internet Financial.

Regulators should be focusing on the greatest risks to the system and the safety and soundness of financial institutions, rather than pushing lawful businesses to the shadow banking system, says consultant and former California regulator Walter Mix.