JIRA supports MSSQL using the jTDS drivers, as described here: https://confluence.atlassian.com/display/AdminJIRAServer072/Supported+platforms
If the driver supports it and the database behaves normally from the application's perspective, and you haven't installed third-party plugins that bypass our normal means of getting a database connection, then I don't know of any reason why it wouldn't work.
That said, encrypted databases are not part of our testing matrix, so if it turns out that it causes problems, whether functionally or by impairing performance, then we might not be able to offer you support for it.
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