Digital currencies and central banks have become increasingly prominent topics in IELTS Writing Task 2 examinations, particularly over the past five years. Based on analysis of recent test reports and cryptocurrency regulations around the world, this theme appears in approximately 15% of economic-related questions and shows strong potential for future appearances.
Digital Currency and Central Bank Relationship Illustration
Let’s examine one of the most frequently appearing question types on this topic:
Some people believe that central banks should issue their own digital currencies to compete with private cryptocurrencies. Others think this would give too much control to governments over people’s financial activities. Discuss both views and give your opinion.
Question Analysis
This question requires candidates to:
- Discuss advantages of central bank digital currencies (CBDCs)
- Examine concerns about government control
- Present a balanced argument with a clear position
- Support ideas with relevant examples
Sample Essays
Band 8.5 Essay
The debate over government’s role in stabilizing currency through digital means has intensified recently. While some advocate for central bank digital currencies (CBDCs), others worry about excessive governmental oversight. I believe a balanced approach combining innovation with appropriate safeguards is necessary.
Central banks issuing digital currencies could bring several benefits. Firstly, CBDCs would provide a stable, regulated alternative to volatile private cryptocurrencies, ensuring greater financial security for citizens. Moreover, digital currencies would enable faster, cheaper transactions and improve financial inclusion for unbanked populations. The impact of blockchain on global finance could be better managed through official channels, reducing risks of fraud and money laundering.
However, critics raise valid concerns about privacy and government control. Digital currencies would give authorities unprecedented access to individual financial data, potentially enabling surveillance of personal transactions. This could lead to financial discrimination or restricted access based on social behavior. Additionally, centralized control might limit economic freedom and innovation in the financial sector.
In my view, while the risks deserve serious consideration, the benefits of CBDCs outweigh the drawbacks if proper regulations are implemented. Transparent governance frameworks and strict data protection laws could address privacy concerns while maintaining the advantages of digital efficiency. Furthermore, competition between public and private digital currencies could foster innovation while ensuring stability.
Band 6.5 Essay
Nowadays, many people talk about digital money and central banks. Some people think it is good for central banks to make their own digital money, but others worry about too much government control. I will discuss both sides and give my opinion.
First, central bank digital currencies can be good because they are safer than private cryptocurrencies. When government makes digital money, people can trust it more. Also, it is easier to send money to other people quickly and with less cost. Poor people who don’t have bank accounts can also use this digital money.
But some people think it is dangerous because government can see all our money activities. They worry that government will know too much about what we buy and where we spend money. Also, government might stop some people from using their money if they don’t like what they do.
In my opinion, I think central bank digital money is good but we need strong rules to protect people’s privacy. Government should not be able to see everything we do with our money. If we have good rules, digital money can help make life easier for everyone.
Score Analysis
Band 8.5 Essay Analysis
- Task Response (9): Comprehensive coverage with clear position
- Coherence/Cohesion (8): Logical organization with effective paragraphing
- Lexical Resource (8.5): Sophisticated vocabulary use
- Grammar (8.5): Complex structures used accurately
Band 6.5 Essay Analysis
- Task Response (6): Basic ideas covered but less developed
- Coherence/Cohesion (6): Simple organization with some progression
- Lexical Resource (7): Adequate vocabulary with some repetition
- Grammar (7): Mix of simple and complex structures
Key Vocabulary
- cryptocurrency (n) /ˌkrɪptəʊˈkʌrənsi/ – digital currency using encryption
- surveillance (n) /səˈveɪləns/ – close observation of behavior
- unprecedented (adj) /ʌnˈpresɪdentɪd/ – never known or done before
- regulatory (adj) /ˈreɡjələtɔːri/ – controlling or maintaining order
- financial inclusion (n) /faɪˈnænʃəl ɪnˈkluːʒən/ – access to financial services
For additional practice, consider writing about how Blockchain technology: future of transactions? might reshape financial systems. Share your practice essays in the comments for feedback and discussion.
