The theory of optimal currency area (OCA) states that regions that are not limited by national borders and have common features should have a common currency.
The OCA theory was developed in 1961 by Canadian economist Robert Mundell, based on earlier work by Abba Lerner.
The OCA theory states that the introduction of currencies by geographic and geopolitical region, rather than by country, leads to greater economic efficiency.
An OCA must meet four criteria, and some economists suggest a fifth.