Correct, you do not need it. You can create a remote, and then create an encrypted folder/bucket on that remote, and store your passwords (and salts for that matter) in your rclone.conf, in which they are hashed. Then, when you run sync/copy, it's "seamless" from your perspective, other than the extra overhead of encrypting the files on your end. But don't lose your password/salt, because all the remote sees is the encrypted blob.
Edit
Look at my configure here: You see I have crypt buckets. Those are naturally encrypted. I even have one which encrypts and then compresses.