The recent collapse of Japan-based Mt. Gox bitcoin exchange could ultimately lead to improvement in the virtual currency industry, according to New York's banking regulator.

Mt. Gox, once the world's largest bitcoin exchange, halted dealing in the virtual currency last month after it lost nearly half a billion dollars worth of bitcoins.

While the collapse of the exchange prompted many to predict that the virtual currency has no future, Benjamin Lawsky, superintendent at New York's Department of Financial Services, said collapse of the exchange was part of a shaking out, which could eventually strengthen the virtual currency industry by removing weaker operators and prompting more regulatory supervision.

Speaking to reporters on the sidelines of a banking conference in the U. S. capital, Lawsky said, "It's on the one hand a setback, on the other hand it will cause further improvements in this industry and some more regulatory involvement."

In addition, Lawsky floated the idea of launching a "BitLicense" to regulate virtual currency operators and stressed on the need to align new virtual currency rules with existing financial regulations.

Meanwhile, Mt. Gox has filed for bankruptcy protection in Japan, saying it might have lost as many as 850,000 bitcoins because of hacking into its computer system.

Japan's Finance Minister Taro Aso said the government was still trying to determine how the exchange could lose nearly half a billion dollars worth of the bitcoins in a short period.