diff --git a/packages/askar/src/wallet/AskarBaseWallet.ts b/packages/askar/src/wallet/AskarBaseWallet.ts
index 64755bb951..5ae967425b 100644
--- a/packages/askar/src/wallet/AskarBaseWallet.ts
+++ b/packages/askar/src/wallet/AskarBaseWallet.ts
@@ -483,12 +483,13 @@ export abstract class AskarBaseWallet implements Wallet {
     data,
     header,
   }: WalletDirectEncryptCompactJwtEcdhEsOptions) {
-    if (encryptionAlgorithm !== 'A256GCM') {
-      throw new WalletError(`Encryption algorithm ${encryptionAlgorithm} is not supported. Only A256GCM is supported`)
+    if (encryptionAlgorithm !== 'A256GCM' && encryptionAlgorithm !== 'A128CBC-HS256') {
+      throw new WalletError(
+        `Encryption algorithm ${encryptionAlgorithm} is not supported. Only A256GCM and A128CBC-HS256 are supported`
+      )
     }
 
-    // Only one supported for now
-    const encAlg = KeyAlgs.AesA256Gcm
+    const encAlg = encryptionAlgorithm === 'A256GCM' ? KeyAlgs.AesA256Gcm : KeyAlgs.AesA128CbcHs256
 
     // Create ephemeral key
     const ephemeralKey = AskarKey.generate(keyAlgFromString(recipientKey.keyType))
@@ -497,7 +498,7 @@ export abstract class AskarBaseWallet implements Wallet {
       ...header,
       apv,
       apu,
-      enc: 'A256GCM',
+      enc: encryptionAlgorithm,
       alg: 'ECDH-ES',
       epk: ephemeralKey.jwkPublic,
     }
@@ -548,8 +549,8 @@ export abstract class AskarBaseWallet implements Wallet {
     if (header.alg !== 'ECDH-ES') {
       throw new WalletError('Only ECDH-ES alg value is supported')
     }
-    if (header.enc !== 'A256GCM') {
-      throw new WalletError('Only A256GCM enc value is supported')
+    if (header.enc !== 'A256GCM' && header.enc !== 'A128CBC-HS256') {
+      throw new WalletError('Only A256GCM and A128CBC-HS256 enc values are supported')
     }
     if (!header.epk || typeof header.epk !== 'object') {
       throw new WalletError('header epk value must contain a JWK')
@@ -566,9 +567,7 @@ export abstract class AskarBaseWallet implements Wallet {
       throw new WalletError('Key entry not found')
     }
 
-    // Only one supported for now
-    const encAlg = KeyAlgs.AesA256Gcm
-
+    const encAlg = header.enc === 'A256GCM' ? KeyAlgs.AesA256Gcm : KeyAlgs.AesA128CbcHs256
     const ecdh = new EcdhEs({
       algId: Uint8Array.from(Buffer.from(header.enc)),
       apu: header.apu ? Uint8Array.from(TypedArrayEncoder.fromBase64(header.apu)) : Uint8Array.from([]),
diff --git a/packages/askar/src/wallet/__tests__/AskarWallet.test.ts b/packages/askar/src/wallet/__tests__/AskarWallet.test.ts
index 106d371dfc..687a48d59a 100644
--- a/packages/askar/src/wallet/__tests__/AskarWallet.test.ts
+++ b/packages/askar/src/wallet/__tests__/AskarWallet.test.ts
@@ -176,7 +176,7 @@ describe('AskarWallet basic operations', () => {
     await expect(askarWallet.verify({ key: k256Key, data: message, signature })).resolves.toStrictEqual(true)
   })
 
-  test('Encrypt and decrypt using JWE ECDH-ES', async () => {
+  test('Encrypt and decrypt using JWE ECDH-ES A256GCM', async () => {
     const recipientKey = await askarWallet.createKey({
       keyType: KeyType.P256,
     })
@@ -216,6 +216,46 @@ describe('AskarWallet basic operations', () => {
     expect(JsonEncoder.fromBuffer(data)).toEqual({ vp_token: ['something'] })
   })
 
+  test('Encrypt and decrypt using JWE ECDH-ES A128CBC-HS256', async () => {
+    const recipientKey = await askarWallet.createKey({
+      keyType: KeyType.P256,
+    })
+
+    const apv = TypedArrayEncoder.toBase64URL(TypedArrayEncoder.fromString('nonce-from-auth-request'))
+    const apu = TypedArrayEncoder.toBase64URL(TypedArrayEncoder.fromString(await askarWallet.generateNonce()))
+
+    const compactJwe = await askarWallet.directEncryptCompactJweEcdhEs({
+      data: JsonEncoder.toBuffer({ vp_token: ['something'] }),
+      apu,
+      apv,
+      encryptionAlgorithm: 'A128CBC-HS256',
+      header: {
+        kid: 'some-kid',
+      },
+      recipientKey,
+    })
+
+    const { data, header } = await askarWallet.directDecryptCompactJweEcdhEs({
+      compactJwe,
+      recipientKey,
+    })
+
+    expect(header).toEqual({
+      kid: 'some-kid',
+      apv,
+      apu,
+      enc: 'A128CBC-HS256',
+      alg: 'ECDH-ES',
+      epk: {
+        kty: 'EC',
+        crv: 'P-256',
+        x: expect.any(String),
+        y: expect.any(String),
+      },
+    })
+    expect(JsonEncoder.fromBuffer(data)).toEqual({ vp_token: ['something'] })
+  })
+
   test('decrypt using JWE ECDH-ES based on test vector from OpenID Conformance test', async () => {
     const {
       compactJwe,
diff --git a/packages/core/src/wallet/Wallet.ts b/packages/core/src/wallet/Wallet.ts
index aebe9c592b..dcd2a46863 100644
--- a/packages/core/src/wallet/Wallet.ts
+++ b/packages/core/src/wallet/Wallet.ts
@@ -122,7 +122,7 @@ export interface UnpackedMessageContext {
 
 export interface WalletDirectEncryptCompactJwtEcdhEsOptions {
   recipientKey: Key
-  encryptionAlgorithm: 'A256GCM'
+  encryptionAlgorithm: 'A256GCM' | 'A128CBC-HS256'
   apu?: string
   apv?: string
   data: Buffer