Rclone has obscure password option which can mask the real password when added to scripts for automation.
Can the same be added to restic.
I’m not convinced that this helps. It’s an instance of security through obscurity and only gives you a false sense of security in my option and increases complexity.
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Agree
The best would be public private key security 
Hi @saviodsouza please also see this issue on GitHub Support asymmetric backups · Issue #187 · restic/restic · GitHub
So, in conclusion, to defend best against attackers taking over a server that uses restic for backups, I think we would need to implement both (non-dumb storage and asymmetric crypto). That’s a long-term goal
