Citi chief economist highly critical of Swiss gold requirement, compares it to bitcoin in having no intrinsic value

Willem Buiter, Citigroup’s chief economist and a former Bank of England policy maker, criticized a proposed initiative requiring the Swiss National Bank (SNB) to increase its gold holdings from 8 to 20 percent of total assets and never sell the precious metal. He compared gold to Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term as having no intrinsic value and added that it's uneconomical to produce and store. He wrote in a report:

"Forbidding a central bank from ever selling any gold it owns reduces the value of those gold holdings to zero."

Buiter argued that even if gold had intrinsic value, it doesn't make sense to force a central bank to hold any single commodity. Rather, "if the central bank is to invest in commodities, better to have a balanced portfolio of commodities or, more conveniently, a balanced portfolio of commodity ETFs or other derivatives."

The report comes in response to a contentious referendum in Switzerland over the “Save Our Swiss Gold” measure, which SNB President Thomas Jordan has deemed as "dangerous".

Switzerland is already the world's 7th largest holder of gold. Should the initiative proceed, the country will rank third behind the US and Germany. Bank of America estimates gold prices will rise 18% should the Swiss proceed on the buying spree.

Citi has been bearish on bitcoin prices during the past year. The bank's foreign Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term division, CitiFX, has published several reports predicting downward pressure.