The topic of digital currencies and their impact on global finance has been gaining significant traction in recent IELTS Writing Task 2 examinations. Based on an analysis of past exam questions and current financial trends, it’s highly likely that this theme will continue to appear in future tests. Let’s explore a relevant question that closely mirrors those seen in actual IELTS exams:
Some people believe that digital currencies like Bitcoin will eventually replace traditional forms of money. To what extent do you agree or disagree with this view?
Analyzing the Question
This question requires candidates to consider the potential of digital currencies to supplant conventional money. Key points to address include:
- The current role of digital currencies in the financial system
- Advantages and disadvantages of digital currencies compared to traditional money
- The likelihood of widespread adoption of digital currencies
- Potential barriers to digital currencies replacing traditional money
Let’s examine three sample essays that demonstrate different levels of proficiency in addressing this topic.
Sample Essay 1 (Band 8-9)
Digital currencies, particularly cryptocurrencies like Bitcoin, have undeniably disrupted the global financial landscape in recent years. While some enthusiasts predict these digital assets will eventually supersede traditional forms of money, I believe that a complete replacement is unlikely in the foreseeable future, though digital currencies will certainly play an increasingly significant role in the global economy.
Proponents of digital currencies argue that they offer several advantages over traditional money. Firstly, transactions using cryptocurrencies can be faster and cheaper, especially for international transfers, as they bypass intermediaries like banks. Additionally, the decentralized nature of many digital currencies makes them resistant to government manipulation and inflation, which is particularly appealing in countries with unstable economies. Furthermore, blockchain technology, which underpins most cryptocurrencies, offers enhanced transparency and security for financial transactions.
However, several factors impede the wholesale adoption of digital currencies as a replacement for traditional money. The extreme volatility of cryptocurrencies makes them unreliable as a store of value or medium of exchange, which are fundamental functions of money. Moreover, the lack of widespread acceptance and understanding among the general public and businesses poses a significant barrier to adoption. Regulatory concerns and the potential for use in illicit activities have also led many governments to approach digital currencies with caution.
Traditional forms of money, backed by central banks and governments, still offer stability and universal acceptance that digital currencies struggle to match. While innovations like Central Bank Digital Currencies (CBDCs) may bridge some gaps, they essentially represent digitized versions of traditional currencies rather than a complete paradigm shift.
In conclusion, while digital currencies are undoubtedly reshaping aspects of global finance, it is more likely that they will coexist with and complement traditional forms of money rather than entirely replacing them. The future financial landscape will likely be a hybrid system, incorporating the strengths of both digital and traditional currencies to meet diverse economic needs.
(Word count: 309)
Digital currency vs traditional money
Essay Analysis (Band 8-9)
This essay demonstrates excellent task achievement, coherence and cohesion, lexical resource, and grammatical range and accuracy, warranting a Band 8-9 score:
Task Achievement: The essay fully addresses all parts of the task, presenting a clear position with a well-developed argument. It discusses both the potential for digital currencies to replace traditional money and the barriers to this happening.
Coherence and Cohesion: The essay is well-organized with clear progression throughout. Each paragraph has a clear central topic, and ideas are logically sequenced. Cohesive devices are used effectively and appropriately.
Lexical Resource: A wide range of vocabulary is used accurately and appropriately. Sophisticated lexical items are employed, such as “supersede,” “decentralized,” and “paradigm shift.”
Grammatical Range and Accuracy: The essay demonstrates a wide range of grammatical structures used accurately and appropriately. Complex sentences are used effectively, and there are no noticeable errors.
Sample Essay 2 (Band 6-7)
In recent years, digital currencies like Bitcoin have become more popular, and some people think they will replace normal money in the future. While digital currencies have some advantages, I don’t fully agree that they will completely replace traditional forms of money.
One reason why digital currencies might replace traditional money is that they can be faster and cheaper to use, especially for sending money to other countries. Also, they are not controlled by governments, which some people like because it means the government can’t change the value of the currency. Digital currencies also use new technology called blockchain, which makes transactions more secure.
However, there are also problems with digital currencies that make it hard for them to replace normal money. One big issue is that the value of digital currencies can change a lot in a short time, which makes them risky to use for everyday purchases. Also, many people and businesses don’t understand or accept digital currencies yet, so it’s not easy to use them everywhere. Governments are also worried about digital currencies being used for illegal activities, so they are trying to make rules about how they can be used.
Traditional money, like dollars or euros, is still more stable and accepted everywhere. Even though some countries are thinking about making their own digital versions of their currencies, these would still be connected to the traditional money system.
In conclusion, while digital currencies are becoming more important in the financial world, I think they will probably exist alongside traditional money rather than completely replacing it. In the future, we might use both digital and traditional currencies depending on what we need them for.
(Word count: 287)
Essay Analysis (Band 6-7)
This essay demonstrates good task achievement, coherence and cohesion, lexical resource, and grammatical range and accuracy, warranting a Band 6-7 score:
Task Achievement: The essay addresses the main parts of the task and presents a clear position. However, the ideas could be more fully developed and supported.
Coherence and Cohesion: The essay is generally well-organized with clear progression. Paragraphing is logical, but the use of cohesive devices could be more sophisticated.
Lexical Resource: A sufficient range of vocabulary is used appropriately, with some attempts at more sophisticated lexical items. However, there is less precision and sophistication compared to the Band 8-9 essay.
Grammatical Range and Accuracy: The essay uses a mix of simple and complex sentence structures with generally good control. There are no major grammatical errors, but the range is not as wide as in the Band 8-9 essay.
Sample Essay 3 (Band 5-6)
Nowadays, digital money like Bitcoin is getting popular. Some people think it will replace normal money in the future. I think this idea has both good and bad points.
Digital money has some good things. It’s fast to send money to other countries. Also, the government can’t control it, which some people like. It uses new technology that makes it safe to use.
But there are also problems with digital money. The price of Bitcoin can go up and down very fast, so it’s risky to use. Many people don’t know how to use it, and many shops don’t accept it. Governments are worried about people using it for bad things.
Normal money is still better in some ways. Everyone knows how to use it, and you can use it everywhere. Some countries are thinking about making their own digital money, but it would still be like normal money.
In conclusion, I think digital money is important, but it won’t completely replace normal money. Maybe in the future, we will use both kinds of money.
(Word count: 168)
Essay Analysis (Band 5-6)
This essay demonstrates adequate task achievement, coherence and cohesion, lexical resource, and grammatical range and accuracy, warranting a Band 5-6 score:
Task Achievement: The essay addresses the task, but the ideas are underdeveloped. The position is somewhat clear, but the argument lacks depth.
Coherence and Cohesion: There is a basic organizational structure, but paragraphing and the use of cohesive devices are limited.
Lexical Resource: The vocabulary is adequate for the task, but the range is limited and repetitive. There are no attempts at more sophisticated lexical items.
Grammatical Range and Accuracy: Simple sentence structures are used accurately, but there is limited use of complex structures. The grammatical range is narrow.
Key Vocabulary to Remember
Cryptocurrency (noun) /ˌkrɪptəʊˈkʌrənsi/: A digital or virtual currency that uses cryptography for security.
Blockchain (noun) /ˈblɒktʃeɪn/: A decentralized, distributed ledger technology underlying most cryptocurrencies.
Volatility (noun) /ˌvɒləˈtɪləti/: The tendency to change quickly and unpredictably, especially for the worse.
Decentralized (adjective) /diːˈsentrəlaɪzd/: Controlled by several local offices or authorities rather than one single one.
Adoption (noun) /əˈdɒpʃn/: The act of starting to use something new or different.
Paradigm shift (noun) /ˈpærədaɪm ʃɪft/: A fundamental change in approach or underlying assumptions.
Intermediary (noun) /ˌɪntəˈmiːdiəri/: A person or organization that acts as a link between people in order to try and bring about an agreement.
Regulatory (adjective) /ˈreɡjələtəri/: Relating to or responsible for regulation.
Coexist (verb) /ˌkəʊɪɡˈzɪst/: To exist together or at the same time.
Hybrid (noun/adjective) /ˈhaɪbrɪd/: Something that is a mixture of two different things.
Conclusion
The topic of digital currencies reshaping global finance is likely to remain relevant in IELTS Writing Task 2 examinations. To prepare effectively, practice writing essays on related themes such as:
- The impact of cryptocurrencies on traditional banking systems
- The potential benefits and risks of Central Bank Digital Currencies (CBDCs)
- The role of blockchain technology in transforming financial transactions
- The challenges of regulating digital currencies in a global economy
We encourage you to practice writing your own essay on the given topic and share it in the comments section below. This active engagement will help you improve your writing skills and prepare more effectively for your IELTS examination.