Well, you could say the Dollar is backed by $4.5 trillion in Fed holdings.
Do we believe in free markets or not?
Sure. What does that have to do with competing currencies eliminating interest rate and reserve requirement manipulation?
Free trade in currencies is an illusion without the ability for new entrants to get into the market. Governments follow the same general pattern throughout the world. Look at Japan’s response to it’s central planning by MITI, now METI.
Look at how the IRS ruled on bitcoin. Are they neutral arbiters of what is and isn’t a currency. The market works and you have demonstrated a deep belief in markets.
What’s the harm of a true free market in currency? Stocks, bonds and ETFs are very close to being currency.