Data stored on Google is encrypted with 128-bit AES, an industrial-strength encryption standard used by the government, banks, credit card companies, and others to keep all information locked up and safe from prying eyes. Now you can automatically enjoy the same protection.
The announcement says that you can manage the keys yourself or have Google do it for you. If you manage the keys yourself, not even Google employees will be able to see your data. A Google spokesperson also said that the company "does not provide encryption keys to any government."
Server-side encryption is already active for all new data written to Cloud Storage, whether for creating new objects or overwriting existing objects. Older objects will be migrated and encrypted in the coming months.
You can read more at http://googlecloudplatform.blogspot.in/2013/08/google-cloud-storage-now-provides.html.