(Kitco News) - Unlike bitcoin, Facebook's Lira is backed by fiat currencies, which altogether make it more investable as a trading vehicle, this according to Peter Schiff, CEO of Euro Pacific Capital.

"I'm happy with Facebook coming up with what I believe would be superior to bitcoin because it would be a digital currency backed by something," he said.

However, Schiff noted that the fiat currencies backing Libra still aren't as reliable as gold.

Facebook wants to back Libra with dollars, in euros, in yen, and other currencies. What would be better would be if Libra would be backed by gold, and of course, ultimately, that would happen,

He added that in a true free market, gold would eventually beat out other currencies as the default backing of cryptos like Libra.

Schiff said that while some cryptocurrencies are linked to illegal activities, he doesn't think the government should ban them. On the contrary, governments should allow free markets to take reign.

"I support the free markets. I'm not saying the government should outlaw bitcoin or any of these other coins," he said. "I don't care, really, if some criminals use private money for criminal activity. I don't like it, but I'm willing to accept that because the benefit is freedom. The benefit is that honest people have real money, have privacy."

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Watch more of the interview with Peter Schiff on Kitco News.

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This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.