In a series of tweets, he said the Government's decision has several gains for farmers, traders, labourers, who are the economic backbone of our nation.
"I always said that the Government's measure will bring a degree of inconvenience but this short term pain will pave way for long term gains," he said.
"No longer will the progress & prosperity of rural India be curtailed by corruption & black money. Our villages must get their due," his another tweet read.
Reiterating his call for a "cashless society, he said, "We also have a historic opportunity to embrace increased cashless payments & integrate latest technology in economic transactions."
Modi also said the ban on Rs 500 and Rs 1,000 notes had given "a historic opportunity to embrace increased cashless payments and integrate latest technology in economic transactions".
"Together we must ensure that India defeats black money. This will empower the poor, new middle class and benefit future generations," Modi said.
Modi announced demonetisation on the night of November 8, saying it was meant to fight black money, corruption, fake currency and terror funding.
The opposition observed a "black day" on Thursday with a protest near Mahatma Gandhi's statue inside the Parliament complex to mark one month of demonetisation.
Congress Vice President Rahul Gandhi said the currency spike was not a "bold but a foolish decision". And the Paytm - an e-wallet service - meant "Pay To Modi".
"It is an experiment conjured by the Prime Minister on individual basis, and every expert who had an opinion about this pushed aside and the Prime Minister took this so-called bold decision," Gandhi said.
"But bold decisions can also be a foolish decision and this was a foolish decision, and it has devastated this country."
CPI-M General Secretary Sitaram Yechury agreed, calling demonetisation a "man-made disaster" and saying it had only made the rich richer at the cost of the poor.
He said the government had failed to achieve its four stated objectives when it came up with the note ban.
"Each of these aims has proven to be wrong, both factually and by empirical evidence on ground," Yechury said on Facebook.
He said demonetisation had brought the "economy to a halt in the last month" and said no section of the society had been left untouched from the turmoil, hardship and pain caused by the "Tughlaqi firman".
He also accused the Modi government of writing off Rs 1.12 lakh crore of unreturned bank loans of corporates.
"The Modi government has made the rich richer, all at the cost of the poor and the middle class."
West Bengal Chief Minister Mamata Banerjee too targeted Modi, saying that demonetisation had killed over 90 people.
"One month since demonetisation was announced. More than 90 lives lost. How many more Modi babu?" Banerjee tweeted.
The Trinamool Congress supremo tweeted a list of 90 names who she said had died while standing in bank or ATM queues or committed suicide due to lack of cash after the note ban.
Meanwhile, the Maharashtrawadi Gomantak Party (MGP), a BJP ally in Goa, said demonetisation had caused hardship to people.
"While the idea to weed out black money is good, the manner in which demonetisation has been implemented has put people in hardship," said MGP President Deepak Dhavalikar.