Why do different countries have different currency ? Why not there are different currencies for each 10-20 kilometers?

Question

I have researched a bit in different forums.

Main answers include: 1. So Different countries can control different monetary policies 2. So different countries can handle shocks(up and down). 3.Based on region,human resource, natural resources, geographical position, cultural diversity, ethnicity etc

1.My question is why not control money as if there is a single country (with more than one states(suppose each state is a country))?

2.Why currency will be divided based on region,human resource, natural resources, geographical position, cultural diversity, ethnicity etc? (states/places in a single country can also have diversity then how they can be managed and several countries cannot be managed?)

3.Because if that is the case who decides we need different currencies based on which conditions (eg. eurozone)? If the division is true why not there are different currencies for each 10-20 kilometers(or where there is more rice growth,or where there is no agriculture but more tourism difference based on these differences)?

Edit : please don't make it duplicate because I am asking after seeing the other questions. After checking now I want to know more derived from that answers.. please refer q 2,3

Answer 1

If the division is true why not there are different currencies for each 10-20 kilometers(or where there is more rice growth,or where there is no agriculture but more tourism difference based on these differences)?

If I'm grasping your question correctly, that type of hyper-fragmentation of currency areas would largely wipe out the standardization advantage that money has over barter (By standardization I am not referring to the ISO classification of currencies, but to their feature of being a mutually-acknowledged unit for trading).

Historically, fragmentation of currency areas has occurred during wars and/or early postwar. Two examples come to my mind. One is the Mexican Revolution (1910-1921), where various groups of rebels and armies got in the habit of inventing their own currency and deploying them in territories they occupied. It was jokingly said that Francisco "Pancho" Villa used to print his bills while on horseback.

Another, more recent example dates from the mid 1990s, during the precarious period once the Balkan war was brought to an end (see Dayton Agreement). I recall a Polish reporter of name Kasia Wyderko mentioning during a TV roundtable from late 1990s that there were three currencies in Bosnia-Herzegovina, their areas being delimited by the ethnic profile of each territory (croats, serbs, and muslims, accordingly). Unfortunately, the roundtable doesn't appear to be uploaded, but some reference to the multiple currencies in Bosnia-Herzegovina in the mid 1990s is this Wikipedia site.

Other than the answers to the "duplicate" question, the aforementioned instances reflect that fragmentation of currency areas is somehow a "last resort" where marked distrust, instability, or resentment precludes economic cohesion and the adoption of a common currency. The isolation and barter-like limitations that ensue from that fragmentation in a small economy most often hinders its dynamism or adaptability.