diff --git a/modules/bitgo/test/v2/unit/keychains.ts b/modules/bitgo/test/v2/unit/keychains.ts
index da7d9870c2..09b60cd2f5 100644
--- a/modules/bitgo/test/v2/unit/keychains.ts
+++ b/modules/bitgo/test/v2/unit/keychains.ts
@@ -292,7 +292,6 @@ describe('V2 Keychains', function () {
         assert.ok(Object.keys(keys).length === expectedLength, 'should have the expected number of keys');
         for (const [key, value] of Object.entries(keys)) {
           assert.ok(key.includes('xpub') || key.includes('randomid'), 'key should be xpub or randomid');
-          JSON.parse(value as string).v.should.equal(2, 'password change must always emit v2 envelopes');
           const decryptedPrv = await bitgo.decrypt({ input: value as string, password: newPassword });
           decryptedPrv.should.startWith('xprv');
         }
@@ -409,7 +408,7 @@ describe('V2 Keychains', function () {
         await bitgo.decrypt({ input: newKeychain.encryptedPrv, password: oldPassword }).should.be.rejected();
       });
 
-      it('single keychain password update upgrades a v1 (SJCL) envelope to v2', async () => {
+      it('single keychain password update preserves a v1 (SJCL) envelope by default', async () => {
         const prv = 'xprvtest-v1';
         const encryptedPrv = await bitgo.encrypt({ input: prv, password: oldPassword, encryptionVersion: 1 });
         JSON.parse(encryptedPrv).should.not.have.property('v', 2, 'pre-condition: input must not be v2');
@@ -417,8 +416,7 @@ describe('V2 Keychains', function () {
         const keychain = { xpub: 'xpub123', encryptedPrv };
         const newKeychain = await keychains.updateSingleKeychainPassword({ keychain, oldPassword, newPassword });
 
-        const newEnvelope = JSON.parse(newKeychain.encryptedPrv);
-        newEnvelope.v.should.equal(2, 'v1 keychain must be upgraded to v2 after password change');
+        JSON.parse(newKeychain.encryptedPrv).should.not.have.property('v', 2, 'v1 keychain must stay v1 by default');
 
         const decryptedPrv = await bitgo.decrypt({ input: newKeychain.encryptedPrv, password: newPassword });
         decryptedPrv.should.equal(prv, 'new password must decrypt to original prv');
@@ -426,8 +424,8 @@ describe('V2 Keychains', function () {
         await bitgo.decrypt({ input: newKeychain.encryptedPrv, password: oldPassword }).should.be.rejected();
       });
 
-      it('single keychain password update keeps a v1 envelope as v1 when encryptionVersion: 1 is passed', async () => {
-        const prv = 'xprvtest-v1-opt-out';
+      it('single keychain password update upgrades a v1 envelope to v2 when encryptionVersion: 2 is passed', async () => {
+        const prv = 'xprvtest-v1-opt-in';
         const encryptedPrv = await bitgo.encrypt({ input: prv, password: oldPassword, encryptionVersion: 1 });
 
         const keychain = { xpub: 'xpub123', encryptedPrv };
@@ -435,20 +433,20 @@ describe('V2 Keychains', function () {
           keychain,
           oldPassword,
           newPassword,
-          encryptionVersion: 1,
+          encryptionVersion: 2,
         });
 
-        JSON.parse(newKeychain.encryptedPrv).should.not.have.property('v', 2, 'v1 opt-out must not emit v2');
+        JSON.parse(newKeychain.encryptedPrv).v.should.equal(2, 'v2 opt-in must emit a v2 envelope');
 
         const decryptedPrv = await bitgo.decrypt({ input: newKeychain.encryptedPrv, password: newPassword });
         decryptedPrv.should.equal(prv, 'new password must decrypt to original prv');
       });
 
-      it('updatePassword upgrades v1 keychains to v2 and keeps v2 keychains as v2', async function () {
+      it("updatePassword preserves each keychain's existing envelope version by default", async function () {
         const v1Prv = 'xprv-v1';
         const v2Prv = 'xprv-v2';
 
-        const encV1 = await bitgo.encrypt({ input: v1Prv, password: oldPassword });
+        const encV1 = await bitgo.encrypt({ input: v1Prv, password: oldPassword, encryptionVersion: 1 });
         const encV2 = await bitgo.encrypt({ input: v2Prv, password: oldPassword, encryptionVersion: 2 });
         const encOther = await bitgo.encrypt({ input: 'xprv-other', password: 'different-password' });
 
@@ -481,7 +479,7 @@ describe('V2 Keychains', function () {
         assert.ok(updatedV1, 'v1 keychain must be in the result');
         assert.ok(updatedV2, 'v2 keychain must be in the result');
 
-        JSON.parse(updatedV1).v.should.equal(2, 'v1 keychain must be upgraded to v2 on password change');
+        JSON.parse(updatedV1).should.not.have.property('v', 2, 'v1 keychain must stay v1 by default');
         const decryptedV1 = await bitgo.decrypt({ input: updatedV1, password: newPassword });
         decryptedV1.should.equal(v1Prv);
 
diff --git a/modules/sdk-api/src/bitgoAPI.ts b/modules/sdk-api/src/bitgoAPI.ts
index 126d5e5c31..c4b2d480db 100644
--- a/modules/sdk-api/src/bitgoAPI.ts
+++ b/modules/sdk-api/src/bitgoAPI.ts
@@ -2006,7 +2006,7 @@ export class BitGoAPI implements BitGoBase {
    * @param oldPassword {String} - the current password
    * @param newPassword {String} - the new password
    */
-  async changePassword({ oldPassword, newPassword }: ChangePasswordOptions): Promise<any> {
+  async changePassword({ oldPassword, newPassword, encryptionVersion }: ChangePasswordOptions): Promise<any> {
     if (!_.isString(oldPassword)) {
       throw new Error('expected string oldPassword');
     }
@@ -2029,7 +2029,7 @@ export class BitGoAPI implements BitGoBase {
     // we just need to choose a coin that exists in the current environment
     const coin = common.Environments[this.getEnv()].network === 'bitcoin' ? 'btc' : 'tbtc';
 
-    const updateKeychainPasswordParams = { oldPassword, newPassword };
+    const updateKeychainPasswordParams = { oldPassword, newPassword, encryptionVersion };
     const v1KeychainUpdatePWResult = await this.keychains().updatePassword(updateKeychainPasswordParams);
     const v2Keychains = await this.coin(coin).keychains().updatePassword(updateKeychainPasswordParams);
 
diff --git a/modules/sdk-api/src/types.ts b/modules/sdk-api/src/types.ts
index 21466db7ae..a327e608a4 100644
--- a/modules/sdk-api/src/types.ts
+++ b/modules/sdk-api/src/types.ts
@@ -268,6 +268,12 @@ export interface GetEcdhSecretOptions {
 export interface ChangePasswordOptions {
   oldPassword: string;
   newPassword: string;
+  /**
+   * Envelope version to emit for the re-encrypted keychains. Defaults to preserving each
+   * keychain's existing envelope version (no forced migration). Pass `2` to opt in to the
+   * Argon2id upgrade for v1 (SJCL) keychains once the caller is ready.
+   */
+  encryptionVersion?: EncryptionVersion;
 }
 
 /**
diff --git a/modules/sdk-api/test/unit/bitgoAPI.ts b/modules/sdk-api/test/unit/bitgoAPI.ts
index 68c6a2f750..9a29e2e42a 100644
--- a/modules/sdk-api/test/unit/bitgoAPI.ts
+++ b/modules/sdk-api/test/unit/bitgoAPI.ts
@@ -1008,6 +1008,8 @@ describe('Constructor', function () {
     const ROOT = 'https://app.example.local';
     let bitgo: BitGoAPI;
     let sandbox: sinon.SinonSandbox;
+    let v1UpdatePasswordStub: sinon.SinonStub;
+    let v2UpdatePasswordStub: sinon.SinonStub;
 
     beforeEach(function () {
       sandbox = sinon.createSandbox();
@@ -1031,13 +1033,15 @@ describe('Constructor', function () {
 
       sandbox.stub(bitgo, 'verifyPassword').resolves(true);
 
+      v1UpdatePasswordStub = sandbox.stub().resolves({ keychains: { k1: 'v1enc' }, version: 25 });
       sandbox.stub(bitgo, 'keychains').returns({
-        updatePassword: sandbox.stub().resolves({ keychains: { k1: 'v1enc' }, version: 25 }),
+        updatePassword: v1UpdatePasswordStub,
       } as any);
 
+      v2UpdatePasswordStub = sandbox.stub().resolves({ v2k1: 'v2enc' });
       sandbox.stub(bitgo, 'coin').returns({
         keychains: () => ({
-          updatePassword: sandbox.stub().resolves({ v2k1: 'v2enc' }),
+          updatePassword: v2UpdatePasswordStub,
         }),
       } as any);
     });
@@ -1088,6 +1092,18 @@ describe('Constructor', function () {
 
       legacyScope.isDone().should.be.true();
     });
+
+    it('forwards encryptionVersion to both v1 and v2 keychains().updatePassword calls', async function () {
+      nock(ROOT).get('/api/v2/user/checkBatchingPasswordFlow').query(true).reply(200, { isBatchingFlowEnabled: false });
+      nock(ROOT)
+        .post('/api/v1/user/changepassword', (body: any) => !!body.keychains && !!body.v2_keychains)
+        .reply(200, {});
+
+      await bitgo.changePassword({ oldPassword: 'oldpw', newPassword: 'newpw', encryptionVersion: 2 });
+
+      sinon.assert.calledWithMatch(v1UpdatePasswordStub, { encryptionVersion: 2 });
+      sinon.assert.calledWithMatch(v2UpdatePasswordStub, { encryptionVersion: 2 });
+    });
   });
 
   describe('createUserEcdhKeychain - encryptionVersion threading', function () {
diff --git a/modules/sdk-core/src/bitgo/keychain/iKeychains.ts b/modules/sdk-core/src/bitgo/keychain/iKeychains.ts
index 8af222cc30..de5d03cdc5 100644
--- a/modules/sdk-core/src/bitgo/keychain/iKeychains.ts
+++ b/modules/sdk-core/src/bitgo/keychain/iKeychains.ts
@@ -94,9 +94,10 @@ export interface UpdatePasswordOptions {
   oldPassword: string;
   newPassword: string;
   /**
-   * Envelope version to emit for the re-encrypted keychains. Defaults to `2` (Argon2id),
-   * so v1 (SJCL) keychains are transparently upgraded to v2 as part of the password change.
-   * Pass `1` to keep emitting legacy v1 envelopes (used by the UI until the Sept 15 breaking-change window closes).
+   * Envelope version to emit for the re-encrypted keychains. Defaults to preserving each
+   * keychain's existing envelope version (no forced migration). Pass `2` to opt in to the
+   * Argon2id upgrade for v1 (SJCL) keychains once the caller is ready (e.g. after the
+   * Sept 15 breaking-change window closes).
    */
   encryptionVersion?: EncryptionVersion;
 }
@@ -106,8 +107,8 @@ export interface UpdateSingleKeychainPasswordOptions {
   oldPassword?: string;
   newPassword?: string;
   /**
-   * Envelope version to emit. Defaults to `2` (Argon2id).
-   * Pass `1` to keep emitting legacy v1 (SJCL) envelopes.
+   * Envelope version to emit. Defaults to preserving the source envelope's version.
+   * Pass `2` to opt in to the Argon2id upgrade.
    */
   encryptionVersion?: EncryptionVersion;
 }
diff --git a/modules/sdk-core/src/bitgo/keychain/keychains.ts b/modules/sdk-core/src/bitgo/keychain/keychains.ts
index 65ab406420..b8249b7aeb 100644
--- a/modules/sdk-core/src/bitgo/keychain/keychains.ts
+++ b/modules/sdk-core/src/bitgo/keychain/keychains.ts
@@ -175,15 +175,16 @@ export class Keychains implements IKeychains {
   }
 
   /**
-   * Update the password used to decrypt a single keychain. Defaults to re-encrypting as v2
-   * (Argon2id + AES-256-GCM), so v1 (SJCL) keychains are transparently upgraded to v2 as part
-   * of the password change. Callers that still need v1 output (e.g. the UI until the Sept 15
-   * breaking-change window closes) can pass `encryptionVersion: 1`.
+   * Update the password used to decrypt a single keychain. Defaults to preserving the
+   * source envelope version (v1 stays v1, v2 stays v2), so this is a no-op with respect to
+   * encryption version unless the caller opts in. Pass `encryptionVersion: 2` to explicitly
+   * upgrade a v1 (SJCL) keychain to v2 (Argon2id + AES-256-GCM) as part of the password change
+   * (e.g. once a caller is ready, after the Sept 15 breaking-change window closes).
    * @param params
    * @param params.keychain - The keychain whose password should be updated
    * @param params.oldPassword - The old password used for encrypting the key
    * @param params.newPassword - The new password to be used for encrypting the key
-   * @param params.encryptionVersion - Optional envelope version to emit; defaults to 2 (Argon2id)
+   * @param params.encryptionVersion - Optional envelope version to emit; defaults to the source envelope's version
    * @returns {Promise<Keychain>}
    */
   async updateSingleKeychainPassword(params: UpdateSingleKeychainPasswordOptions = {}): Promise<Keychain> {
@@ -205,7 +206,7 @@ export class Keychains implements IKeychains {
       const newEncryptedPrv = await this.bitgo.encrypt({
         input: decryptedPrv,
         password: params.newPassword,
-        encryptionVersion: params.encryptionVersion ?? 2,
+        encryptionVersion: params.encryptionVersion ?? this.getEncryptionVersion(oldEncryptedPrv),
       });
       return _.assign({}, params.keychain, { encryptedPrv: newEncryptedPrv });
     } catch (e) {