I encountered the same problem with Element (im.riot.Riot) recently. The error message is not really clear about what encryption is being unsupported here. This appears to be about gnome-keyring’s encryption for account credentials. That means gnome-keyring can’t store your login credentials in an encrypted storage for some reason. I could not figure out what the actual problem is. gnome-keyring is running on my system.
You can just choose the option “Use no encryption”. Be mindful that this dialog will not come up again after that choice and I do not know how to change it again. Signal should start up after you have made that choice.
My experience is that this choice did not affect the encryption of messages and authenticity of my Element/Matrix sessions. But I would like to know more about what the actual problem is.