The invention provides a generation protection method and system of an encrypted storage key, a terminal and a readable storage medium. The generation protection method comprises the following steps:encrypting a preset protection key and a working key by adopting a preset encryption algorithm, and storing a ciphertext; the user setting a user password through the upper management server and binding the user password to the password device; synthesizing the temporary master key and a preset user password into a preset user password master key; a security module generating a first random number, and performing XOR operation on the first random number and a preset protection key to form a first protection key; comparing the input user password master key with a preset user password master key stored in a security module; if the comparison is passed, passing identity authentication. According to the method and the system, the user identity is discriminated, one-time encryption of the protection key is realized, and the protection strength of the storage protection key is greatly improved. The security module supports safe storage of random number generation, a symmetric cryptographicalgorithm, an asymmetric encryption algorithm and a secret key.