How are his coins different from Barter? Barter is legal and one would be bartering his coins for goods and services.
In economic terms they are totally different. Barter requires a double coincidence of wants. If I'm a chicken owning pickle wanter I need to find a pickle owning chicken wanter in order to make a trade. Because they are valued commonly, coins can serve as a medium of exchange thus solving the double coincidence problem. It's the whole point behind money and arguable anything that can serve as a medium of exchange can, at least in theory, be accused of competing with government money.