White House Pushback on Trump-Backed Sovereign Wealth Fund Proposal

A sovereign wealth fund proposed by Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick has encountered resistance within the White House, despite being developed at the direction of President Donald Trump. Trump’s Initial Vision Sparks Speculation Trump’s February executive order instructed the Treasury and Commerce Departments to draft a framework for a U.S. sovereign wealth fund within 90 days. This prompted speculation that such a fund might invest in Bitcoin or other digital assets, especially given Trump’s increasing interest in crypto. While this sparked hope among crypto advocates, Bessent and Lutnick clarified early on that the focus would be on traditional financial assets such as equity and warrants. Nonetheless, David Sacks—appointed by Trump as his crypto adviser—hinted that Bitcoin could still be considered as part of the fund’s assets. That possibility now seems unlikely following a separate move by Trump. In March, he signed an executive order to establish a dedicated Strategic Bitcoin Reserve and a digital asset stockpile, signaling a parallel but independent strategy for managing crypto assets. Funding Source and Structure Remain Unclear There were also discussions around whether tariffs or other government revenues could finance the fund, but Lutnick later dismissed the idea of using tariffs. “Tariffs will not be used to support the sovereign wealth fund,” he confirmed. Although the plan was submitted to Trump in early May, no final decision has been reached. Kush Desai, a spokesperson for the White House, confirmed that the departments have fulfilled their directive, but emphasized that “no final decisions have been made.” Desai added that the proposed sovereign wealth fund aligns with Trump’s broader objectives to bolster national and economic security. Ongoing Deliberations and Potential Uses The details surrounding how the fund will operate, or what it will invest in, remain unsettled. According to sources familiar with the matter, Trump has yet to decide how any returns from the fund would be used. One possibility he has floated is acquiring a stake in TikTok—currently facing a U.S. ban unless Chinese parent company ByteDance sells its stake. Meanwhile, Bessent and Lutnick are also spearheading the development of the U.S. Strategic Bitcoin Reserve and Digital Asset Stockpile. These crypto-specific initiatives will include frameworks for acquisition, custody, and operation, and are being designed to have no impact on the federal budget. As deliberations continue, both crypto and traditional finance communities are watching closely to see how the Trump administration’s vision for long-term national investments takes shape.

Source: CryptoIntelligence