In order to better distribute regular cash to regular individuals, President Donald Trump announced Monday that he would establish a sovereign wealth fund, which would be a collection of assets similar to those found in other nations.
However, comprehensive information about the fund’s operation was not readily available. During a ceremony in the Oval Office, Trump made the news. During his 2024 presidential campaign, he had proposed the establishment of such a fund.
At the event, Treasury Secretary Scott Bessent gave a quick overview of the fund.
“It will be a combination of liquid assets, assets that we have in this country as we work … to bring them out for the American people,” he stated.
“The extraordinary size and scale of the U.S. government and the business it does with companies … should create value for American citizens,” Bessent stated. “If we are going to buy 2 billion Covid vaccines, maybe we should have some warrants and some equity in these companies and have that grow for the help of the American people.”
According to Trump, the process of establishing up the fund, which might take up to a year to organize, would also require Commerce Secretary Howard Lutnick. Although he did not provide specifics about how such an undertaking would operate, Lutnick stated on Monday that the capital might be used to assist in taking over TikTok.
The world’s largest sovereign wealth fund is located in Norway. It reinvests oil earnings in equities and other assets. For each Norwegian person, its present net worth is roughly $325,000.
Iran, Russia, Australia, Saudi Arabia, and China are among the other nations having sizable sovereign wealth funds.
There are other state-run funds in Texas and Alaska.
According to a 2024 Carnegie Endowment for International Peace study, sovereign wealth funds have the potential to become “conduits of corruption, money laundering, and other illicit activities” in the absence of appropriate safeguards including governance and regulatory frameworks.