OpenTofu has released state encryption, a feature that encrypts both state and plan files in infrastructure management. Encryption is crucial for protecting sensitive information such as credentials, access keys, and configurations from exposure, which could lead to severe security breaches. The new feature uses robust encryption methods and key providers like PBKDF2, AWS KMS, GCP KMS, and OpenBao. State encryption can be configured through a special "encryption" block within the "terraform" block. Encrypting state files ensures that only authorized users have access to read the information, significantly reducing the risk associated with breaches.