As I understand, this simply reduces the value of current black money. To spend Rs. 1000 of black money had a cost X which is now increased many fold (either by doing multiple rounds of banks to convert it or legitimizing it somehow and paying a tax on it). Also, current black money will be losing value pretty fast over the next 50 days to 0.
Also, this potentially decreases the value of cash for future. The govt. of India has shown that cash can be pulled out of circulation at moments notice. This increases the risk on cash more than risk on rupee (wrt to USD or gold etc). In an efficient market, this should promote cashless economy in the long term.
Correct me if I'm wrong