shadow/man/login.defs.d/ENCRYPT_METHOD.xml

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<varlistentry>
  <term><option>ENCRYPT_METHOD</option> (string)</term>
  <listitem>
    <para>
      This defines the system default encryption algorithm for encrypting
      passwords (if no algorithm are specified on the command line).
    </para>
    <para>
      It can take one of these values:
      <itemizedlist>
        <listitem>
          <para><replaceable>DES</replaceable> (default)</para>
        </listitem>
        <listitem>
          <para><replaceable>MD5</replaceable></para>
        </listitem>
        <listitem>
          <para><replaceable>SHA256</replaceable></para>
        </listitem>
        <listitem>
          <para><replaceable>SHA512</replaceable></para>
        </listitem>
      </itemizedlist>
    </para>
    <para>
      Note: this parameter overrides the <option>MD5_CRYPT_ENAB</option>
      variable.
    </para>
    <para condition="pam">
      Note: This only affect the generation of group passwords.
      The generation of user passwords is done by PAM and subject to the
      PAM configuration. It is recommended to set this variable
      consistently with the PAM configuration.
    </para>
  </listitem>
</varlistentry>