diff --git a/Setting-the-Bichon-Encryption-Password.md b/Setting-the-Bichon-Encryption-Password.md
new file mode 100644
index 0000000..530e9cc
--- /dev/null
+++ b/Setting-the-Bichon-Encryption-Password.md
@@ -0,0 +1,68 @@
+## 🔐 Setting the Bichon Encryption Password
+
+Bichon uses an encryption password to protect sensitive data. **You must set it before first use**, when no data exists.
+
+Once the password is set, it **cannot be changed**. Changing it later will make all encrypted data unreadable. To start over, you must **reinitialize Bichon and delete all emails and metadata**.
+
+---
+
+### 🆕 New in v0.2.0: Password File Support
+
+Starting from **v0.2.0**, Bichon supports loading the encryption password from a file using the `bichon_encrypt_password_file` option (or its corresponding environment variable).
+
+* If **`bichon_encrypt_password_file` is specified**, Bichon will:
+
+  * Read the file content
+  * Use the file’s content (as-is) as the encryption password
+
+* If **`bichon_encrypt_password_file` is NOT set**, Bichon falls back to:
+
+  * `bichon-encrypt-password` (CLI argument), or
+  * `BICHON_ENCRYPT_PASSWORD` (environment variable)
+
+---
+
+### How to Set the Password
+
+You can set the password using **one of the following methods**.
+
+---
+
+### 📄 Password File (Recommended for Production)
+
+**Command-line:**
+
+```bash
+bichon --bichon-encrypt-password-file /path/to/password.txt
+```
+
+**Environment variable:**
+
+```bash
+export BICHON_ENCRYPT_PASSWORD_FILE=/path/to/password.txt
+bichon
+```
+
+> The file should contain only the password string (no extra whitespace or newlines).
+
+---
+
+### ⌨️ Command-Line (Direct Password)
+
+```bash
+bichon --bichon-encrypt-password "your-strong-password"
+```
+
+---
+
+### 🌱 Environment Variable
+
+```bash
+export BICHON_ENCRYPT_PASSWORD="your-strong-password"
+bichon
+```
+
+---
+
+**Tip:**
+Use a strong, securely stored password. Once set, it **cannot be changed** without wiping all encrypted data.