About AES Password Encryption and Primary Encryption Keys
You can enable strong, reversible 128-bit Advanced Encryption Standard (AES) password encryption, also known as type-6 encryption. To start using type-6 encryption, you must enable the AES password encryption feature and configure a primary encryption key, which is used to encrypt and decrypt passwords.
After you enable AES password encryption and configure a primary key, all existing and newly created clear-text passwords for supported applications (currently RADIUS and TACACS+) are stored in type-6 encrypted format, unless you disable type-6 password encryption. You can also configure Cisco NX-OS to convert all existing weakly encrypted passwords to type-6 encrypted passwords.