Cinder supports an encrypted volume type. This needs to be supported by QEMU against RBD-backed Cinder volumes.
QEMU patches to support this feature are pending review https://lists.gnu.org/archive/html/qemu-devel/2015-12/msg04354.html
Marking as a duplicate of RHBZ#1285089 where we are looking into moving to using QEMU's native LUKS support in the future. *** This bug has been marked as a duplicate of bug 1285089 ***