Ok, I played around with this issue & I think I have what cover all possible combinations. In the repo you can find working examples. There are 3 possible approaches, and the right one will depend on what's already in your project - details that were unspecified in the original question.
- Solution while using webpack 5 next.config.js
module.exports = {
  future: {
    webpack5: true, // by default, if you customize webpack config, they switch back to version 4. 
      // Looks like backward compatibility approach.
  },
  webpack(config) {
    config.resolve.fallback = {
      ...config.resolve.fallback, // if you miss it, all the other options in fallback, specified
        // by next.js will be dropped. Doesn't make much sense, but how it is
      fs: false, // the solution
    };
    return config;
  },
};
- Solution while using webpack 4 - next.config.js
module.exports = {
  webpack(config) { // we depend on nextjs switching to webpack 4 by default. Probably they will 
    // change this behavior at some future major version.
    config.node = {
      fs: "empty", // webpack4 era solution 
    };
    return config;
  },
};
- You could consider using other library. According to node-jsencrypt readmethey are node port of jsencrypt, and here I assume you try to build for browser. The node library got stuck at version 1, while the original library is already at version 3. As I checked in the last commit on main, if you use this library, it's building just fine without any issues.
Original, nextjs unaware answer:
Since version 5, webpack doesn't include polyfiles for node libraries. In your case, you most likely need to add resolve.fallback.fs: false to your webpack config.
More about this option- https://webpack.js.org/configuration/resolve/#resolvefallback
It mentioned in v4 to v6 migration guide, if this is your case:
https://webpack.js.org/migrate/5/