diff --git a/apps/api/src/auth/localCredentials.ts b/apps/api/src/auth/localCredentials.ts
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+++ b/apps/api/src/auth/localCredentials.ts
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+/**
+ * localCredentials.ts — password hashing and verification using node:crypto scrypt.
+ *
+ * D-08: Uses node:crypto scrypt — zero new npm dependencies; no native node-gyp build
+ * in the Docker image. PHC-style encoded format allows parameter evolution without
+ * a separate DB migration.
+ *
+ * Security properties:
+ *   - 16-byte per-hash random salt — unique salt per password prevents rainbow table attacks
+ *   - scrypt parameters: N=16384 (2^14), r=8, p=1 — OWASP-compatible
+ *   - 32-byte (256-bit) output key
+ *   - timingSafeEqual for constant-time comparison — prevents timing oracle attacks
+ *   - verifyPassword never throws — returns false on any parse/format/crypto error
+ *   - Passwords are never logged
+ *
+ * Encoded format: scrypt$N$r$p$<salt_base64url>$<hash_base64url>
+ * Example:        scrypt$16384$8$1$<22-char-b64url>$<43-char-b64url>
+ * Max length: ~83 chars — fits in varchar(256) password_hash column
+ */
+
+import { scryptSync, randomBytes, timingSafeEqual } from 'node:crypto';
+
+// OWASP-compatible scrypt parameters for password hashing
+const SCRYPT_N = 16384; // CPU/memory cost factor (2^14)
+const SCRYPT_R = 8; // block size
+const SCRYPT_P = 1; // parallelization factor
+const KEY_LEN = 32; // 256-bit derived key output
+
+/**
+ * Hash a password using scrypt with a random 16-byte salt.
+ *
+ * Returns a self-describing PHC-style encoded string:
+ *   scrypt$N$r$p$<salt_base64url>$<hash_base64url>
+ *
+ * The encoded format embeds all parameters so verifyPassword can re-derive
+ * the hash without relying on hardcoded constants — supports future parameter
+ * migration without a DB schema change.
+ *
+ * NOTE: scryptSync blocks the event loop. For a 2-person household with
+ * infrequent logins this is acceptable. Use promisify(scrypt) if async is needed.
+ */
+export function hashPassword(password: string): string {
+  const salt = randomBytes(16);
+  const hash = scryptSync(password, salt, KEY_LEN, { N: SCRYPT_N, r: SCRYPT_R, p: SCRYPT_P });
+  return [
+    'scrypt',
+    SCRYPT_N,
+    SCRYPT_R,
+    SCRYPT_P,
+    salt.toString('base64url'),
+    hash.toString('base64url'),
+  ].join('$');
+}
+
+/**
+ * Verify a password against a stored PHC-encoded hash.
+ *
+ * Parses the algorithm parameters from the stored string, re-derives the
+ * candidate hash using scryptSync, and compares with timingSafeEqual to
+ * prevent timing-oracle attacks.
+ *
+ * Security:
+ *   - timingSafeEqual: requires equal-length buffers; storedHash.length as keylen
+ *     ensures this regardless of the stored KEY_LEN at hash time.
+ *   - Returns false (never throws) on any parse error, invalid base64url, or
+ *     scrypt parameter error — safe to call with untrusted input.
+ *   - Never logs the candidate password.
+ *
+ * @returns true if candidate matches the stored hash; false otherwise (incl. errors)
+ */
+export function verifyPassword(storedEncoded: string, candidate: string): boolean {
+  try {
+    const parts = storedEncoded.split('$');
+    if (parts.length !== 6) return false;
+    const [, n, r, p, saltB64, hashB64] = parts;
+    const salt = Buffer.from(saltB64, 'base64url');
+    const storedHash = Buffer.from(hashB64, 'base64url');
+    if (salt.length === 0 || storedHash.length === 0) return false;
+    const candidateHash = scryptSync(candidate, salt, storedHash.length, {
+      N: Number(n),
+      r: Number(r),
+      p: Number(p),
+    });
+    return timingSafeEqual(storedHash, candidateHash);
+  } catch {
+    // Catch any scrypt parameter errors, buffer errors, or other crypto exceptions.
+    // Never propagate — return false for all error cases.
+    return false;
+  }
+}