📋 Written Ability Test (WAT)/Essay Analysis Guide
Topic: Should Digital Currencies Be Regulated Like Traditional Fiat Currencies?
🌐 Understanding the Topic’s Importance
The regulation of digital currencies is a critical issue, intersecting finance, technology, and governance. For B-schools, it reflects an applicant’s ability to assess innovation within traditional frameworks.
⏱️ Effective Planning and Writing
- Time Allocation:
- Reading & Planning: 5 minutes
- Writing: 20 minutes
- Review: 5 minutes
- Structure:
- Introduction: 60-70 words
- Body: 350-375 words
- Conclusion: 60-70 words
✍️ Introduction Techniques
- Contrast Approach: “While fiat currencies rely on central banks for stability, cryptocurrencies are decentralized and volatile, challenging traditional regulatory systems.”
- Solution-Based Approach: “The rise of cryptocurrencies necessitates a regulatory framework that balances innovation with financial stability.”
📂 Structuring the Essay Body
- Achievements: Highlight innovation and financial inclusivity.
- Example: “Cryptocurrencies empower 1.7 billion unbanked people globally.”
- Challenges: Discuss volatility and illicit activities.
- Example: “Over $14 billion in cryptocurrencies was involved in illegal activities in 2021 (Chainalysis).”
- Future Outlook: Suggest global regulations with local adaptations.
📜 Concluding Effectively
- Balanced Perspective: “Regulating cryptocurrencies like fiat currencies ensures economic stability while fostering innovation.”
- Global Comparison: “Adopting regulatory frameworks akin to Switzerland can help balance risks and opportunities.”
🔍 Analyzing Successes and Shortcomings
- Achievements: Financial inclusion, payment innovations.
- Challenges: Cybersecurity risks, speculative volatility.
🔑 Recommendations for Sustainable Progress
- Develop hybrid regulatory models.
- Enhance international collaboration.
- Promote public-private partnerships for innovation.
📄 Sample Short Essays
1. Balanced Perspective:
“Cryptocurrencies represent financial innovation but require regulation to mitigate risks like cybercrime. A hybrid approach, balancing innovation and oversight, is key.”
2. Solution-Oriented:
“Global regulatory frameworks can foster cryptocurrency innovation while ensuring economic stability. Public-private partnerships are crucial.”
3. Global Comparison:
“Countries like Switzerland show how regulatory clarity fosters innovation while safeguarding investor interests.”