From ArchWiki

systemd-creds is a utility and service provided by systemd, designed to securely store and retrieve credentials used by systemd units. It aims to simplify the management of sensitive information, such as usernames, passwords, API keys, and other authentication data, required by various services and applications.

See [1] and systemd-creds(1) for more information

Credential encryption

Credentials may optionally be encrypted and authenticated, either with a key derived from a local TPM2 chip, or one stored in /var/, or both (the default) if available. To check if your system uses TPM2 encryption or only the key stored in /var/, run

$ systemd-creds has-tpm2

To encrypt a secret stored in plaintext.txt, run

# systemd-creds --name=foobar encrypt plaintext.txt ciphertext.cred
Note: In case of sensitive credentials, consider using a tmpfs for plaintext.txt

Encrypted credentials carry the intended name in them, so they cannot be mispurposed. If you omit --name, then the filename will be used as credential name.

You can check that encryption was successful with

# shred -u plaintext.txt
# systemd-run -P --wait -p LoadCredentialEncrypted=foobar:$(pwd)/ciphertext.cred systemd-creds cat foobar

Without using --name above, the correct command would be

# systemd-run -P --wait -p LoadCredentialEncrypted=ciphertext.cred:$(pwd)/ciphertext.cred systemd-creds cat ciphertext.cred 

Alternatively, you can use systemd-ask-password to provide the secret without first writing it to disk. The -p switch allows outputting a credential in a format ready to be included in a service file:

# systemd-ask-password -n | systemd-creds encrypt --name=mysql-password -p - -
🔐 Password: ***************         
SetCredentialEncrypted=mysql-password: \
       AAAAAALACMA8AAAACAAAAAAngAgws4cwpkrOvpxVf4/GSyOYCoQ4dmPs3Vcfg3D0eH/Ov \
       cAEC/U9JTyeHgktYBDl8U5jOq/NqFX3IPc24EX7aeTevsL6OKwlTDcF04W1M6eodqngRo \
       1JfRqHWnSfVHHYVXgMjIkWT4AcC0OoqAzQobK5e5G1zjTPygiG/ewGttY9sueKCL/INUu \
       n1e6/QB6D9T0x9Sl18CeBtoASepCAE4ACAALAAAAEgAgY9RHOefBR+mMgV/Frr+UzQX1S \
       IsLFItIbfB6Ep76It0AEAAgKH2Tduip205Dw0GVkME+yvOUNYVhnSHYqWHQoxelKrdj1E \
       c558FH6YyBX8Wuv5TNBfVIiwsUi0ht8HoSnvoi3QAAAAA3WzuXTYG2OFX9wFo740b3YjE \
       ZtiCWakoAOxzX+D/vIFyB3INROxpfXUCV7LY4eRITI9PJZiE6lGn4kjZBnbUf47yo1WDG \

Edit the service file to include the relevant credential

Tips and tricks

For an example, see Borgmatic#Using systemd-creds to provide a password for borgmatic.service