On Monday, President Donald Trump implemented an executive order instructing the U.S. Treasury and Commerce departments to begin the process of establishing a sovereign wealth fund.

Treasury Secretary Scott Bessent anticipates that the fund could become operational within a year and is intended to finance significant government initiatives and strategic investments, particularly in vital areas like supply chains.

Trump indicated that the fund may be utilized for major infrastructure projects, including highways and airports, as well as for investments in advanced defense systems and medical research.

The president proposed the idea of using the fund to assist in acquiring TikTok, suggesting it could entail either a direct buyout or a collaboration with affluent individuals.

While he did not provide specific details, he underscored that the arrangement would need to be advantageous.

Previously, Trump mentioned a joint venture that would see the U.S. holding a 50 percent stake in TikTok, a suggestion that has raised legal concerns.

Additionally, Howard Lutnick, Trump's nominee for Commerce Secretary, pointed out that the sovereign wealth fund might also invest in companies that hold significant government contracts, particularly those engaged in producing COVID-19 vaccines.

This proposal follows similar discussions among Democrats, who have contemplated setting up a sovereign wealth fund as well.

Sovereign wealth funds are substantial capital reserves owned by governments and have played a crucial role in global investments, especially in the Middle East and Europe.

Nevertheless, uncertainties persist regarding how the timeline for this new U.S. fund coincides with the ongoing efforts to tackle the status of TikTok, which faces scrutiny over national security issues.

The White House has yet to release additional information about the executive order.