Ken Griffin’s $32 billion hedge fund is backing efforts to make the Treasury market safer and sounder through the backstop of a central clearinghouse.

Citadel in June became the first firm to clear both a Treasury and repurchase agreement through a new Depository Trust & Clearing Corp. platform. In March, DTCC changed its rules so more companies like Citadel that aren’t members of its clearinghouse can get trades processed there by going through a member firm.

Short-term funding markets have been increasingly vexed over recent years by spikes in rates at month- and quarter-end, when many dealers pull out of...