"Our sellers are able to produce hundreds of thousands of masks per day," Silverman said on "Closing Bell."
Etsy began to see "overwhelming demand" for masks from shoppers last week after the Centers for Disease Control and Prevention began recommending Americans wear a cloth face covering to protect against the coronavirus, Silverman said.
Etsy, an e-commerce marketplace, responded by asking existing sellers to consider making face masks, offering guidelines for sellers who wanted to do so. There about 2.7 million Etsy sellers "who are crafts people," Silverman said.
He said the masks from Etsy sellers are important because they provide Americans an opportunity to comply with CDC recommendations while not taking away medical-grade masks that are needed by health-care workers.
It also an opportunity for Etsy sellers who may be experiencing a decline in demand for their other products to continue generating income, Silverman said.
"For example many people might be making wedding dresses, and the wedding season is pretty hard-hit right now so they can shift to making fabric face masks instead," said Silverman, former CEO of Skype.
Silverman said he wanted to be "very clear" that Etsy was not claiming masks bought from its marketplace will prevent people from contracting COVID-19.
"The CDC itself has said a fabric face mask is probably better than nothing but please do not assume that this keeps you or the people around you safe. It's an additive measure. It's not preventative," he stressed.