An encrypted text field is a field type whose value is partially or completely masked. The value of an encrypted field is only visible to users who have the “View Encrypted Data” permission in their profile.
This field type allows an intermediate security level: some will see the field displayed in full, others will not see the field at all and finally some will see the mask (X or *).
Encrypted data may nevertheless be included in reports and search results.
Use encrypted custom fields only when government regulations require it because they involve more processing and have search-related limitations.
It is used in so-called sensitive data: banking information for example.
NB: Encrypted fields are not available for formulas.