1

Some Bitcoin wallets have this functionality: they let you encrypt an arbitrary text with a Bitcoin address such that only the owner of the address can read the text.

The Monero wallet software allows you to sign a message with your own private keys, but I'm asking about encrypting with someone else's [public] address. (I'm not asking about embedding messages in transactions.)

2

It is theoretically possible (that is what the short payment ids are), but I don't think there's any existing command for this at the moment.

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