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 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.”

Join the iFX EXPO Asia and discover your gateway to the Asian Markets

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 division, CitiFX, has published several reports predicting downward pressure.