The topic of digital currencies and their impact on international banking is becoming increasingly relevant in IELTS Writing Task 2. Based on recent trends, we can expect this theme to appear more frequently in future exams. Let’s examine a sample question that closely resembles those seen in actual IELTS tests:
Some people believe that digital currencies will revolutionize international banking, while others think they pose significant risks. Discuss both views and give your opinion.
Analyzing the Question
This question requires candidates to:
- Discuss the potential benefits of digital currencies in international banking
- Explore the possible risks associated with digital currencies
- Provide a balanced argument and personal opinion
Now, let’s look at sample essays for different band scores, along with detailed analyses.
Sample Essay 1 (Band 8-9)
Digital currencies have emerged as a hot topic in the financial world, with proponents hailing them as the future of international banking while skeptics warn of potential dangers. This essay will examine both perspectives before presenting my own viewpoint.
Those who support digital currencies argue that they could revolutionize international banking in several ways. Firstly, these currencies can facilitate faster and cheaper cross-border transactions, eliminating the need for intermediaries and reducing processing times. For instance, a business in India could instantly transfer funds to a supplier in China without incurring hefty bank fees. Secondly, digital currencies could promote financial inclusion by providing banking services to the unbanked population in developing countries, who often lack access to traditional banking systems.
On the other hand, critics highlight significant risks associated with digital currencies. One primary concern is their volatility, as exemplified by the wild price fluctuations of Bitcoin. This instability could pose a threat to financial stability if digital currencies were widely adopted. Additionally, the anonymity offered by some digital currencies could facilitate money laundering and other illicit activities, making it challenging for authorities to track and regulate financial flows.
In my opinion, while digital currencies do present some risks, their potential benefits for international banking outweigh the drawbacks. However, I believe that careful regulation and oversight are crucial to mitigate the associated risks. Governments and financial institutions should work together to develop frameworks that harness the advantages of digital currencies while addressing security and stability concerns.
In conclusion, digital currencies have the potential to transform international banking by offering faster, cheaper, and more inclusive financial services. Although there are valid concerns about their risks, I believe that with proper regulation, digital currencies can play a positive role in the future of global finance.
(Word count: 298)
Digital currencies transforming international banking
Essay Analysis (Band 8-9)
This essay demonstrates excellent qualities that justify a high band score:
Task Achievement: The essay fully addresses all parts of the task, discussing both views and providing a clear opinion.
Coherence and Cohesion: The essay is well-organized with clear paragraphing and effective use of cohesive devices (e.g., “Firstly,” “Secondly,” “On the other hand,” “In conclusion”).
Lexical Resource: The writer uses a wide range of vocabulary accurately and appropriately (e.g., “facilitate,” “intermediaries,” “financial inclusion,” “volatility”).
Grammatical Range and Accuracy: The essay showcases a variety of complex structures with a high degree of accuracy (e.g., “Those who support digital currencies argue that…” “I believe that careful regulation and oversight are crucial…”).
Development and Support: Each main point is well-developed with relevant examples and explanations.
Sample Essay 2 (Band 6-7)
Digital currencies are becoming more popular these days, and people have different opinions about their effect on international banking. Some think they will make big changes, while others worry about the risks. I will discuss both sides in this essay.
People who like digital currencies say they can make international banking better. One reason is that they can make sending money to other countries faster and cheaper. For example, if someone wants to send money from India to the USA, they can do it quickly with digital currency without paying high bank fees. Also, digital currencies might help people in poor countries who don’t have bank accounts to use financial services.
However, there are also risks with digital currencies. One big problem is that their value can change a lot in a short time. This makes them unstable and risky for people to use. Another issue is that some criminals might use digital currencies for illegal activities because they can be hard to track.
In my opinion, digital currencies have both good and bad points. I think they could be useful for international banking if they are managed carefully. Governments should make rules to control digital currencies and make them safer to use.
To sum up, digital currencies could change international banking by making it faster and easier, but they also have some risks. I believe that with proper control, they can be a good thing for the future of banking around the world.
(Word count: 253)
Essay Analysis (Band 6-7)
This essay demonstrates good qualities that justify a mid-range band score:
Task Achievement: The essay addresses all parts of the task, presenting both views and offering an opinion. However, the ideas could be more fully developed.
Coherence and Cohesion: The essay has a clear structure, but the use of cohesive devices is less sophisticated compared to the Band 8-9 essay.
Lexical Resource: The vocabulary used is adequate but less varied and precise compared to higher band scores (e.g., “make big changes” instead of “revolutionize”).
Grammatical Range and Accuracy: The essay uses a mix of simple and complex sentences with generally good control, but lacks the sophistication of higher band scores.
Development and Support: Main points are supported with examples, but they could be more fully elaborated.
Impact of digital currency on national economies is another crucial aspect to consider when discussing this topic in IELTS Writing Task 2. Understanding the broader economic implications can help strengthen your arguments and provide a more comprehensive analysis.
Key Vocabulary
To enhance your essays on this topic, consider using these advanced vocabulary items:
- Revolutionize (verb) – /ˌrevəˈluːʃənaɪz/ – to change something completely and fundamentally
- Facilitate (verb) – /fəˈsɪlɪteɪt/ – to make an action or process easy or easier
- Volatility (noun) – /ˌvɒləˈtɪləti/ – tendency to change quickly and unpredictably
- Intermediary (noun) – /ˌɪntəˈmiːdiəri/ – a person who acts as a link between people to try and bring about an agreement
- Financial inclusion (noun phrase) – /faɪˈnænʃl ɪnˈkluːʒn/ – the availability and equality of opportunities to access financial services
- Cross-border (adjective) – /krɒs ˈbɔːdə/ – involving two or more countries
- Illicit (adjective) – /ɪˈlɪsɪt/ – forbidden by law, rules, or custom
- Oversight (noun) – /ˈəʊvəsaɪt/ – the action of overseeing something
- Mitigate (verb) – /ˈmɪtɪɡeɪt/ – make (something bad) less severe, serious, or painful
- Regulation (noun) – /ˌreɡjuˈleɪʃn/ – a rule or directive made and maintained by an authority
Infographic on digital currency risks and benefits
Conclusion
The impact of digital currencies on international banking is a complex and evolving topic that is likely to appear in future IELTS Writing Task 2 exams. To prepare effectively, practice writing essays on related themes such as:
- The potential effects of a global digital currency on world economies
- The role of governments in regulating digital currencies
- The future of traditional banking in a world of increasing digitalization
Remember to structure your essays clearly, use a range of advanced vocabulary, and provide balanced arguments supported by relevant examples. By doing so, you’ll be well-equipped to tackle this challenging topic in your IELTS Writing Task 2.
How digital currencies could revolutionize banking is an excellent resource for further exploration of this topic, providing additional insights that can enrich your essays and boost your IELTS Writing score.
We encourage you to practice writing an essay on this topic and share it in the comments section below. This active practice is one of the most effective ways to improve your IELTS Writing skills and prepare for the exam.