Criminals may have been stealing as much as half of the unemployment benefits the U.S. has been pumping out over the past year, some experts say.

Why it matters: Unemployment fraud during the pandemic could easily have reached $400 billion, according to some estimates. The bulk of the money likely ended up in the hands of foreign crime syndicates — making this not just theft, but a matter of national security.

Catch up quick: When the pandemic hit, states weren't prepared for the unprecedented wave of unemployment claims they were about to face.

• They all knew fraud was inevitable but decided getting the money out to people who desperately needed it was more important than laboriously making sure all of them were genuine.

By the numbers: Blake Hall, CEO of ID.me, a service that tries to prevent this kind of fraud, tells Axios that America has lost more than $400 billion to fraudulent claims.

• "As the country approaches a trillion dollars in paid unemployment benefits, a 50%+ fraud rate that is consistent across states is truly staggering," he says.
• Haywood Talcove, the CEO of LexisNexis Risk Solutions, estimates that at least 70% of the money stolen by impostors ultimately left the country, much of it ending up in the hands of criminal syndicates in China, Nigeria, Russia and elsewhere.
• "These groups are definitely backed by the state," Talcove tells Axios.
• Much of the rest of the money was stolen by street gangs domestically, who have made up a greater share of the fraudsters in recent months.

The Treasury Department declined to comment on these estimates.

How it works: Scammers often steal personal information and use it to impersonate claimants. Other groups trick individuals into voluntarily handing over their personal information.

• "Mules" — low-level criminals — are given debit cards and asked to withdraw money from ATMs. That money then gets transferred abroad, often via bitcoin.

The big picture: Before the pandemic, unemployment claims were relatively uncommon, and generally lasted for such short amounts of time that international criminal syndicates didn't view them as a lucrative target.

• After unemployment insurance became the primary vehicle by which the U.S. government tried to keep the economy afloat, however, all that changed.
• Unemployment became where the big money was — and was also being run by bureaucrats who weren't as quick to crack down on criminals as private companies normally are.

Where it stands: Unemployment fraud is now offered on the dark web on a software-as-a-service basis, much like ransomware. States without fraud-detection services are naturally targeted the most.

The bottom line: Many states are now more sophisticated about preventing this kind of fraud. But it's far too late.

Stablecoins — digital currencies linked in a fixed 1-to-1 exchange rate to real currencies like the dollar or the euro — face an existential threat from the world's central banks.

Why it matters: If the future of currency is digital, then stablecoins offer version 1.0 of what a digital dollar might look like. But they are also under-regulated, systemically risky, and uniquely vulnerable to the rise of official central bank-backed digital currencies, or CBDCs.

Where it stands: Stablecoins have been growing fast. The two largest, Tether and USDC, are now worth more than $100 billion combined, up from less than $25 billion at the beginning of the year.

• The quality of the collateral backing Tether, and even the existence of that collateral, is worryingly vague. Fears remain that if Tether is revealed to be a Ponzi, its collapse could bring down bitcoin and the whole world of cryptocurrency.
• The dream of stablecoins is that they will be used for payments — and that's already beginning to happen, in a very small way.
• Regulators have taken note: The Bank of England, for instance, in a new discussion paper, has made it clear that stablecoin payments need to be regulated just as assiduously as anything passing through the banking system.

The big picture: A CBDC is the ultimate stablecoin. Rather than forcing users to trust that some private company is backing its coins with real currency, CBDCs are directly backed by the full faith and credit of the sovereign.

• Stablecoin defenders, like Circle, which issues USDC, say that CBDCs could destabilize the banking system by causing deposits to migrate from banks to retail accounts held directly at the central bank.
• Yes, but: CBDCs can easily be set up as two-tier systems where banks issue their own wallets and individuals can't hold direct accounts with the central bank.

Between the lines: Early CBDCs have been introduced either in countries where the government desires visibility into every commercial transaction (China), or in countries where traditional banking and payments are extremely difficult for topographical reasons (the Bahamas).

• The Fed is moving slowly on creating its own digital currency — this is an area where there's no real first-mover advantage, and where countries can learn a lot from those who go before them.

The bottom line: Stablecoin issuers aren't going to face direct competition from the U.S. government any time soon. But, in 2008, money-market funds almost brought down the financial system. No regulator wants to take the risk that stablecoins might similarly become too big to fail.

El Salvador, wracked with gang violence, has a reputation for being the deadliest place on the planet that isn't an actual war zone.

• It's also the new hotness in the crypto world, after President Nayib Bukele announced (and swiftly enacted a law) saying that his country would accept bitcoin as legal tender.

Context: El Salvador hasn't had its own currency since 2000, when it switched to the dollar. It therefore loses no sovereignty or seignorage by adopting a second external currency as legal tender.

• The law makes any capital gains from investing in bitcoin tax-free, which Bukele hopes will attract some of the crypto industry to his country.

Between the lines: Bukele's authoritarian and anti-democratic tendencies are probably stronger than his grasp of economic concepts like the distinction between stocks and flows.

How it works: The Salvadoran government intends to set up a trust at the Development Bank of El Salvador "to instantly convert bitcoin to U.S. dollars."

• The risk is that El Salvador, either by accident or by design, will become a commission-free laundromat for criminals wanting to turn dirty bitcoin into clean dollars.
• Bukele has frequently been accused of working closely with the MS13 gang in particular.

Be smart: Bukele has framed this move as helping to facilitate remittance flows into the country. But bitcoin has nowhere played an important role in remittances.

• As cryptocurrency consultant Eloisa Marchesoni told Fortune, Bukele's idea, given bitcoin volatility and gas fees, "does not make sense at all.”

The bottom line: El Salvador's move does nothing to reassure observers who worry that bitcoin's prime real-world use case is crime.

The first-ever NFT, Kevin McCoy's "Quantum," was auctioned this morning for $1.47 million, about half an hour after one of 10,000 CryptoPunks sold to betting-technology billionaire Shalom Meckenzie for $11.75 million.

Why it matters: The auction ratifies a truth about the art market that is understood more in theory than in practice.

• The amount of money an artwork is worth is overwhelmingly a function of willingness to pay within a tiny group of incredibly rich collectors — much more than it is a function of intrinsic artistic quality.
• In the clubby world of NFT collectors, the community that has grown up around CryptoPunks is large, rich, and highly liquid. The more traditional art world, by contrast, which produced "Quantum," is more hesitant to get into NFTs and less confident that they will retain their value.

The bottom line: Sotheby's talked up "Quantum" as a "seismic genesis work" comparable to pieces by Picasso, Malevich, and Duchamp. The crypto world, however, still prefers the equivalent of digital trading cards.

Home construction is a deeply inefficient business. But the implosion of Katerra, a startup into which investors plowed some $1.9 billion, proves that disrupting it won't be easy.

Why it matters: The high cost of housing is inextricably linked to the high cost of building new homes. If they could be designed and built using assembly-line technology, that would mean more, cheaper houses in a country that desperately needs them.

How it works: Houses are expensive because the incentive at every level, from developer to contractor to sub-contractor to sub-sub-contractor and so on, is to pad costs rather than cut them. Successful builders learn to expect unexpected costs — and to incorporate them into their quotes.

• By vertically integrating everything from design and materials to building and construction into a single company, Katerra promised not only economies of scale but also an unprecedented degree of control over costs.

The catch: Large factories require substantial and predictable demand, while the construction industry is notoriously cyclical. And while some things can be automated, others, like navigating local permitting processes, cannot.

What they're saying: "Solo attempts by any organization to single-handedly disrupt residential real estate and construction will go the way of Katerra," writes John McManus of The Builder's Daily.

• The future of housing, if it's ever to arrive, necessarily requires close collaboration among multiple stakeholders.
• The holy grail — affordable new housing — will realistically always require government subsidy, too.

The bottom line: Obstacles to new construction are invariably deliberate, placed there by existing residents in an attempt to maximize their own property values. When all building codes are local, it's impossible to confront them in a formulaic and centralized manner.

The best-selling electric car in the world's largest electric car market is not a Tesla. Rather, it's the Hongguang Mini, made by a joint venture you've never heard of named SAIC-GM-Wuling Automobile Co.

• By the numbers: 270,000 Minis have been sold in nine months, at a starting price of just $4,500. Expected sales are 1.2 million vehicles next year.
• GM owns 44% of the company.

Expect slower response times from colleagues — not to mention slower market activity — after last year's postponed UEFA European Championship begins Friday, with a face-off between Turkey and Italy in Rome, writes Axios' Hope King.

• Many stadiums will limit fans to a fraction of full capacity, with Munich's Allianz Arena allowing just 22% or 14,500 people.
• The Euro 2020 final at Wembley, on the other hand, may allow all 90,000 seats to be filled if the U.K. lifts COVID restrictions later this month.

Architecture firm HAL designed the Sky Pool in London, a glass swimming pool that connects two residential towers a stone's throw from the new U.S. embassy.

• The luxury development does include some affordable housing, but those residents aren't allowed pool access, even for a fee.

What they're saying: "Photographs do not capture how deeply unpleasant and inhuman this waking nightmare is to navigate," tweets designer Adam Nathaniel Furman, reacting to an Edwin Heathcote FT column calling the development "a perfect symbol of a disdain for the urban fabric and an attitude of internalised, privatised luxury."