Hi @<1687643893996195840:profile|RoundCat60> ,

Passwords should be encrypted before being stored

That's definitely an option (we had the same idea), however it would mean a more complex configuration procedure and might male it hard for less-savvy people to setup the server. Considering the fact that anyone with access to the server can basically access all data anyway, as @<1523701205467926528:profile|AgitatedDove14> said, having the passwords for the account encrypted won't make or break you protection 🙂 .
BTW - if you're using AWS EC2, you can easily use the AWS Secrets Manager to store this information.