By default, when you store images and other artifacts in an Azure Container Registry, content is automatically encrypted at rest with Microsoft-managed keys. However, this does not satisfy stricter compliance requirements.
In Azure Console -
In Terraform -
References:
https://learn.microsoft.com/en-us/azure/container-registry/
https://registry.terraform.io/providers/hashicorp/azurerm/latest/docs/resources/container_registry#encryption