Digital currencies need more regulation to curb terrorist financing, Indian Prime Minister Narendra Modi said at a major international forum on combating extremist financing.

According to AFP, India has struggled to curb cryptocurrency transactions after years of phenomenal growth supported by growing local trading platforms.

Last year, Modi said bitcoin was a danger to the younger generation and could spoil our youth" if it ended up "in the wrong hands".

On Friday, he went even further and told delegates to the Counterterrorism Financing Conference that "private currencies" pose a serious security threat. "New kinds of technology are being used for terror funding and recruitment. Challenges from the dark net, private currencies and more are emerging," Modi said.

"There is a need for a uniform understanding for new finance technologies," he added. From a uniform understanding, a unified system of checks and balances and regulation can emerge."

Cryptocurrencies have been under scrutiny by Indian regulators since they first entered the local market nearly a decade ago, when a spike in fraudulent transactions led to a central bank ban in 2018.

Two years later, India's Supreme Court lifted the restrictions, and the market has grown dramatically, growing nearly 650 percent in the year to June 2021, second only to Vietnam.

The government also proposed banning "all private cryptocurrencies", but ultimately held back and later taxed profits from "private currencies" at 30 percent.