Digital currencies and their influence on global trade have become increasingly relevant topics in recent IELTS Writing Task 2 exams. This trend reflects the growing importance of cryptocurrencies and blockchain technology in the international economic landscape. As these technologies continue to evolve, it’s highly likely that questions related to their impact on trade will appear more frequently in future IELTS tests. Let’s explore a sample question that closely mirrors those seen in past exams and provide model responses for different band scores.
Some people believe that digital currencies will revolutionize international trade, while others think they pose significant risks to the global economy. Discuss both views and give your own opinion.
Analysis of the Question
This question requires candidates to:
- Discuss the positive impact of digital currencies on international trade
- Explore potential risks associated with digital currencies in the global economy
- Provide a personal opinion on the matter
It’s crucial to address all parts of the question to achieve a high band score. Let’s examine model essays for different band scores, starting with a Band 8 response.
Band 8 Model Essay
The advent of digital currencies has sparked a heated debate about their potential to transform international trade. While proponents argue that these cryptocurrencies will revolutionize global commerce, skeptics warn of significant risks to the world economy. This essay will examine both perspectives before presenting my own viewpoint.
Advocates of digital currencies assert that they will streamline international transactions, making them faster and more cost-effective. By eliminating intermediaries such as banks, cryptocurrencies can reduce transaction fees and processing times, enabling businesses to operate more efficiently across borders. Furthermore, digital currencies could provide financial inclusion for unbanked populations in developing countries, allowing them to participate in global trade more easily. These advantages could potentially lead to a more interconnected and equitable global economy.
On the other hand, critics argue that digital currencies pose substantial risks to the stability of the global financial system. The volatile nature of cryptocurrencies can lead to significant fluctuations in value, potentially disrupting trade relationships and causing economic instability. Additionally, the anonymity associated with some digital currencies raises concerns about money laundering and illicit financial activities, which could undermine the integrity of international trade. There are also worries about the environmental impact of cryptocurrency mining, which consumes vast amounts of energy.
In my opinion, while digital currencies do present certain risks, their potential to revolutionize international trade outweighs these concerns. I believe that with proper regulation and technological advancements, many of the current issues can be addressed. The benefits of increased efficiency, reduced costs, and greater financial inclusion could lead to a more dynamic and inclusive global economy. However, it is crucial for governments and international organizations to collaborate in developing robust frameworks to mitigate the risks associated with digital currencies.
In conclusion, digital currencies have the potential to significantly impact international trade, offering both opportunities and challenges. While concerns about their risks are valid, I believe that with careful management and regulation, digital currencies can ultimately contribute positively to the global economy, fostering innovation and inclusivity in international commerce.
(Word count: 329)
Digital currencies transforming international trade
Explanation of Band 8 Score
This essay demonstrates the characteristics of a Band 8 response:
Task Achievement: The essay fully addresses all parts of the task, discussing both views and providing a clear personal opinion.
Coherence and Cohesion: Ideas are logically organized with clear progression throughout the essay. Paragraphs are well-linked, and cohesive devices are used effectively.
Lexical Resource: A wide range of vocabulary is used accurately and appropriately. For example, “streamline,” “financial inclusion,” “unbanked populations,” and “illicit financial activities.”
Grammatical Range and Accuracy: The essay displays a wide range of grammatical structures used accurately and flexibly. Complex sentences are used effectively without errors that impede communication.
Now, let’s examine a Band 7 model essay on the same topic.
Band 7 Model Essay
The rise of digital currencies has sparked a debate about their impact on global trade. Some believe these new forms of money will bring positive changes to international commerce, while others are concerned about the risks they pose. This essay will discuss both viewpoints and offer my personal opinion.
Supporters of digital currencies argue that they will improve international trade in several ways. Firstly, these currencies can make cross-border transactions faster and cheaper by eliminating the need for intermediary banks. This could be especially beneficial for small businesses that struggle with high fees for international transfers. Secondly, digital currencies might provide access to global markets for people in countries with unstable currencies or limited banking services. This increased participation could lead to more diverse and dynamic international trade.
However, critics point out potential dangers of digital currencies to the global economy. One major concern is the high volatility of cryptocurrency values, which could create uncertainty in trade agreements and pricing. Another issue is the potential for these currencies to be used for illegal activities like money laundering or tax evasion, due to their sometimes anonymous nature. There are also worries about the energy consumption required for cryptocurrency mining and its environmental impact.
In my view, while digital currencies do present some risks, their potential benefits for international trade are significant. I believe that with proper regulation and technological improvements, many of the current problems can be solved. The advantages of faster, cheaper transactions and increased global participation in trade could lead to a more inclusive and efficient world economy.
To conclude, digital currencies have the potential to both positively and negatively affect international trade. While there are valid concerns about their risks, I believe that if managed carefully, digital currencies can ultimately benefit global commerce by promoting innovation and accessibility.
(Word count: 295)
Explanation of Band 7 Score
This essay demonstrates the characteristics of a Band 7 response:
Task Achievement: The essay addresses all parts of the task, presenting both views and a clear personal opinion.
Coherence and Cohesion: The essay is well-organized with clear progression. Paragraphs are generally well-linked, though cohesive devices might be slightly less sophisticated than in a Band 8 essay.
Lexical Resource: A sufficient range of vocabulary is used appropriately, with some less common items. For example, “cross-border transactions,” “intermediary banks,” and “cryptocurrency mining.”
Grammatical Range and Accuracy: A variety of complex structures are used with good control. There may be occasional errors, but they do not impede communication.
Now, let’s examine a Band 6 model essay on the same topic.
Band 6 Model Essay
Digital currencies are a new topic in international trade. Some people think they will make big changes in how countries do business, but others worry about problems they might cause. In this essay, I will talk about both sides and give my opinion.
People who like digital currencies say they will help international trade. They think these new types of money will make it easier and cheaper to send money between countries. This could help small companies that want to sell things in other countries but find it too expensive now. Also, digital currencies might help people in poor countries who don’t have bank accounts to join in international trade. This could make more people able to buy and sell things around the world.
But some people are worried about digital currencies. They think these new moneys might cause problems for the world economy. One big worry is that the value of digital currencies changes a lot, which could make it hard for businesses to plan their prices. Another problem is that bad people might use digital currencies for illegal things because it’s sometimes hard to know who is using them. Some people also worry about how much electricity is used to make digital currencies, which might be bad for the environment.
I think digital currencies could be good for international trade, but we need to be careful. If governments make good rules and if the technology gets better, I believe digital currencies can help make trade between countries easier and fairer. But it’s important to solve the problems that people are worried about.
To finish, I think digital currencies might change international trade in both good and bad ways. Even though there are some risks, I believe that if we use them carefully, they can help make world trade better by making it easier for more people to join in.
(Word count: 291)
Digital currency risks in the global economy
Explanation of Band 6 Score
This essay demonstrates the characteristics of a Band 6 response:
Task Achievement: The essay addresses the task, presenting both views and a personal opinion, but the ideas may be less fully developed compared to higher band scores.
Coherence and Cohesion: There is a clear overall progression, but the linking of ideas may be less skillful. Some paragraphs may not be as well-structured as in higher band essays.
Lexical Resource: An adequate range of vocabulary is used for the task, but there may be some inaccuracy in word choice or repetition. The language used is generally simpler than in Band 7 or 8 essays.
Grammatical Range and Accuracy: A mix of simple and complex sentence forms is used, but there may be some errors. These errors do not significantly impede communication.
Key Vocabulary to Remember
Digital currencies (noun): Electronic forms of money that can be used for online transactions.
Pronunciation: /ˈdɪdʒɪtl ˈkʌrənsiz/Cryptocurrency (noun): A type of digital currency that uses cryptography for security.
Pronunciation: /ˈkrɪptəʊˌkʌrənsi/Blockchain (noun): A system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system.
Pronunciation: /ˈblɒktʃeɪn/Volatility (noun): The tendency to change quickly and unpredictably, especially for the worse.
Pronunciation: /ˌvɒləˈtɪləti/Financial inclusion (noun phrase): The availability and equality of opportunities to access financial services.
Pronunciation: /faɪˈnænʃl ɪnˈkluːʒn/Cross-border transactions (noun phrase): Financial operations that occur between individuals or organizations in different countries.
Pronunciation: /krɒs ˈbɔːdə trænˈzækʃnz/Intermediary (noun): A person or organization that acts as a link between people to try and bring about an agreement.
Pronunciation: /ˌɪntəˈmiːdiəri/Money laundering (noun): The concealment of the origins of illegally obtained money.
Pronunciation: /ˈmʌni ˈlɔːndərɪŋ/
In conclusion, the impact of digital currencies on international trade is a complex and evolving topic that is likely to remain relevant in IELTS Writing Task 2 exams. To prepare for such questions, it’s important to understand both the potential benefits and risks associated with digital currencies in global commerce. Practice writing essays on related topics, such as the future of banking in a digital age or the impact of technology on international financial systems. Remember to always address all parts of the question, provide balanced arguments, and clearly state your own opinion.
We encourage you to practice writing an essay on this topic and share it in the comments section below. This active engagement will help you improve your writing skills and prepare effectively for the IELTS exam. Good luck with your preparations!