No, the user registration solution is not set up to store encrypted passwords.
you can modify the Registration and login page of the user registration solution pack to store the encrypted passwords by following the "Introduction to SecurityAssist" tutorial in the Solution Recipe Section of the security Assist support page.
securityassist/
when you encrypt the password in the database, you will need to also modify the forgot password page. You will need to edit the Email Password server behavior to have it send the NewPW session variable instead of the password from the database, the tutorial touches on this in the "Updating Send Password" section.