On Monday, President Donald Trump signed 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 be operational within a year, with the goal of financing significant government projects and strategic investments, particularly in essential areas like supply chains.

Trump indicated that the fund could be utilized for large infrastructure initiatives, including highways and airports, as well as investments in advanced defense capabilities and medical research.

The president mentioned the possibility of using the fund to aid in the acquisition of TikTok, proposing it could either involve a direct purchase or a collaboration with affluent individuals.

While he did not provide specific details, he stressed that the deal would hinge on establishing the right arrangements.

Previously, Trump has talked about a joint venture that would see the U.S. take a 50 percent ownership in TikTok, although this idea has sparked legal concerns.

Moreover, Trump’s nominee for Commerce Secretary, Howard Lutnick, suggested that the sovereign wealth fund could also invest in companies that hold substantial government contracts, such as those related to COVID-19 vaccine production.

This proposal comes on the heels of similar conversations among Democrats, who have also contemplated forming a sovereign wealth fund.

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

However, there are still uncertainties about how the timeline for the new U.S. fund coincides with ongoing efforts to resolve TikTok's status, which is being examined due to national security issues.

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