• President Donald Trump issued an executive order on Monday for the creation of the nation's first sovereign wealth fund.
• A sovereign wealth fund is a government-owned fund that includes investments in foreign assets.
• The U.S. sovereign wealth fund could be utilized to purchase TikTok's U.S. assets, if the platform's Chinese parent company Bytedance wishes to sell them.

President Donald Trump signed an executive order on Monday to create the nation's first sovereign wealth fund, which could be used to purchase TikTok.

Joining Trump in the Oval Office, Secretary of the Treasury Scott Bessent said the fund will be operational within the next year.

Though Trump did not explicitly indicate what the fund will be used for, he cited purchasing TikTok as one example.

"We're going to be doing something, perhaps with TikTok and perhaps not, if we make the right deal," the president told reporters on Monday. "But I have the right to do that and we might put that in the sovereign wealth fund."

What is a sovereign wealth fund?

A sovereign wealth fund is a government-owned fund that includes investments in foreign assets. In the case of TikTok, the newly ordered fund could be used to purchase the U.S. assets of TikTok from the platform's Chinese parent company ByteDance, if they are interested in selling.

The world's largest sovereign wealth fund is the Norway Government Pension Fund Global, which contained more than $1.7 trillion as of January, according to Investopedia. The fund was established in 1990.

How would a sovereign wealth fund work?

It's unclear how the U.S. could establish a sovereign wealth fund since such funds typically rely on a budget surplus and the U.S. operates at a deficit, Reuters reported. Plus, the move likely would need approval from Congress because of the unclear funding source, the agency reported.

“Obviously you can't establish an institution by executive order and more to the point is you can't fund an institution by executive order,” Clemence Landers, a former Treasury official who is now with the Center for Global Development, told Reuters.

Trump, who raised the idea of a sovereign foreign wealth fund during his campaign to be president, said at the time that it could be funded by "tariffs and other intelligent things."

Bessent said Monday that "there'll be a combination of liquid assets, assets that we have in this country as we work to bring them out for the American people."

"We're going to monetize the asset side of the U.S. balance sheet for the American people," Bessent told reporters.

What is the status of TikTok?

On his first day back in office, President Donald Trump signed an executive order that extended the ban on TikTok, which was implemented by former President Joe Biden last year. Trump's order granted a 75-day extension, which Trump said will allow him to consult with his advisors and heads of "relevant" departments and agencies to address national security concerns posed by TikTok.

The ban signed into law by Biden gave ByteDance until Jan. 19 to divest TikTok. The move followed years of some U.S. government officials expressing fears that TikTok posed a national security threat, concerned that ByteDance is sharing U.S. user data with the Chinese government. TikTok has repeatedly denied these claims.

On Jan. 18, TikTok went dark, becoming unusable on mobile devices and desktops. The platform was also wiped from the Apple App and Google Play stores. A little more than 12 hours later, however, TikTok's power was restored after Trump promised that companies that distribute the platform would not face repercussions.

TikTok has since remained available for use, but the platform was still unavailable for download in app stores as of Monday.

Greta Cross is a national trending reporter at USA TODAY. Follow her on X and Instagram @gretalcross. Story idea? Email her at [email protected].