Digital currencies and their impact on financial inclusion have become increasingly relevant topics in recent IELTS Writing Task 2 exams. This trend reflects the growing importance of financial technology in our global economy. Based on past exam patterns and current financial trends, we can expect to see more questions on this subject in future IELTS tests. Let’s examine a recent question that has appeared in IELTS exams and provide sample essays for different band scores.
Some people think that digital currencies will lead to greater financial inclusion, while others believe they may widen the gap between the rich and the poor. Discuss both views and give your own opinion.
Analyzing the Question
This question requires candidates to discuss two contrasting views on the impact of digital currencies on financial inclusion. The key aspects to address are:
- How digital currencies might increase financial inclusion
- How digital currencies could potentially widen the wealth gap
- Your personal opinion on the issue
It’s crucial to provide balanced arguments for both viewpoints before stating your own position.
Sample Essay 1 (Band 8)
Digital currencies, such as Bitcoin and central bank digital currencies (CBDCs), have sparked a heated debate about their potential impact on financial inclusion. While some argue that these technologies will democratize access to financial services, others contend that they may exacerbate existing economic disparities. This essay will explore both perspectives before offering a nuanced view on this complex issue.
Proponents of digital currencies argue that they have the potential to significantly increase financial inclusion, particularly in developing countries. By leveraging blockchain technology and mobile phones, digital currencies can provide banking services to the unbanked population, who may lack access to traditional financial institutions. For instance, in countries with unstable currencies or limited banking infrastructure, digital currencies offer a more stable store of value and a means of conducting transactions without the need for a bank account. This could empower millions of people to participate in the global economy, facilitating remittances and enabling small businesses to access a wider market.
On the other hand, critics argue that digital currencies may widen the gap between the rich and the poor. They contend that the technology required to access and use digital currencies, such as smartphones and internet connectivity, is not universally available, particularly in low-income communities. Moreover, the complexity of managing digital wallets and understanding cryptocurrency markets may exclude those with limited financial literacy. There is also concern that early adopters and those with significant capital to invest in digital currencies may disproportionately benefit, potentially concentrating wealth among a techno-savvy elite.
In my opinion, while digital currencies do present some risks of exacerbating economic inequalities, their potential to foster financial inclusion outweighs these concerns. However, realizing this potential requires careful implementation and regulation. Governments and financial institutions should work together to ensure that digital currency systems are designed with inclusivity in mind, providing user-friendly interfaces and educational resources to bridge the knowledge gap. Additionally, efforts should be made to expand internet access and digital literacy in underserved communities.
In conclusion, digital currencies have the capacity to revolutionize financial inclusion, but this outcome is not guaranteed. By addressing the challenges of accessibility and education, we can harness the power of digital currencies to create a more inclusive global financial system that benefits people across all socioeconomic levels.
(Word count: 378)
Explanation of Band 8 Score
This essay would likely receive a Band 8 score for the following reasons:
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Task Achievement: The essay fully addresses all parts of the task, discussing both viewpoints and clearly stating a personal opinion.
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Coherence and Cohesion: The essay is well-organized with clear paragraphing and effective use of cohesive devices.
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Lexical Resource: It demonstrates a wide range of vocabulary used accurately and appropriately, including topic-specific terms like “blockchain technology” and “remittances.”
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Grammatical Range and Accuracy: The essay uses a variety of complex sentence structures with a high degree of accuracy.
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Development of Ideas: Ideas are well-developed with relevant examples and clear explanations.
Sample Essay 2 (Band 6)
Nowadays, digital currencies are becoming more popular, and people have different opinions about how they will affect financial inclusion. Some think they will help more people access financial services, while others believe they might make rich people richer and poor people poorer. In this essay, I will discuss both views and give my opinion.
On one hand, digital currencies can help people who don’t have bank accounts. In many poor countries, lots of people can’t use banks because they live far away or don’t have enough money. But with digital currencies, they can use their phones to save money and make payments. This is good because it helps them manage their money better and join the global economy.
However, there are also problems with digital currencies. Not everyone has smartphones or knows how to use them. Poor people might not understand how digital currencies work, which could stop them from using them. Also, rich people who understand technology might make more money from digital currencies, making the gap between rich and poor bigger.
In my opinion, I think digital currencies can be good for financial inclusion if they are used in the right way. Governments should make sure everyone can learn about digital currencies and how to use them safely. They should also make rules to stop rich people from taking advantage of the system.
To conclude, digital currencies have both good and bad points when it comes to financial inclusion. If we are careful about how we use them, they can help more people access financial services and improve their lives.
(Word count: 269)
Explanation of Band 6 Score
This essay would likely receive a Band 6 score for the following reasons:
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Task Achievement: The essay addresses all parts of the task, but the development of ideas is less thorough compared to the Band 8 essay.
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Coherence and Cohesion: There is a clear overall progression, but cohesive devices are less sophisticated.
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Lexical Resource: The vocabulary is adequate for the task, but lacks the precision and sophistication of higher band scores.
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Grammatical Range and Accuracy: The essay uses a mix of simple and complex sentence structures with generally good control, though there are some errors.
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Development of Ideas: Ideas are relevant but less fully extended, with fewer specific examples.
Key Vocabulary to Remember
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Financial inclusion (noun) – /faɪˈnænʃəl ɪnˈkluːʒən/ – The availability and equality of opportunities to access financial services.
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Digital currency (noun) – /ˈdɪdʒɪtl ˈkʌrənsi/ – A form of currency that is available only in digital or electronic form.
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Blockchain technology (noun) – /ˈblɒktʃeɪn tekˈnɒlədʒi/ – A system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system.
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Cryptocurrency (noun) – /ˈkrɪptəʊˌkʌrənsi/ – A digital or virtual currency that is secured by cryptography.
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Remittance (noun) – /rɪˈmɪtns/ – A sum of money sent in payment or as a gift.
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Unbanked (adjective) – /ʌnˈbæŋkt/ – Not having access to the services of a bank or similar financial organization.
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Financial literacy (noun) – /faɪˈnænʃəl ˈlɪtərəsi/ – The ability to understand and effectively use various financial skills.
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Socioeconomic (adjective) – /ˌsəʊsiəʊˌiːkəˈnɒmɪk/ – Relating to or concerned with the interaction of social and economic factors.
In conclusion, the topic of digital currencies and their impact on financial inclusion is likely to remain relevant in future IELTS Writing Task 2 exams. To prepare effectively, practice writing essays on related topics such as the role of digital currencies in the future of banking, the impact of digital wallets on cash usage, and the broader impact of digital currencies on economy. Additionally, stay informed about the latest developments in fintech and how personal credit scores influence financial opportunities.
We encourage you to practice writing your own essay on this topic and share it in the comments section below. This exercise will help you apply the vocabulary and structures demonstrated in the sample essays, improving your writing skills for the IELTS exam.