diff --git a/HISTORY.rst b/HISTORY.rst
index 23fc34a1..caa6cf3a 100644
--- a/HISTORY.rst
+++ b/HISTORY.rst
@@ -16,6 +16,7 @@ PlatformIO Core 6
 6.1.1 (2022-??-??)
 ~~~~~~~~~~~~~~~~~~
 
+* Added new ``monitor_encoding`` project configuration option to configure `Device Monitor <https://docs.platformio.org/en/latest/core/userguide/device/cmd_monitor.html>`__ (`issue #4350 <https://github.com/platformio/platformio-core/issues/4350>`_)
 * Allowed specifying project environments for `pio ci <https://docs.platformio.org/en/latest/core/userguide/cmd_ci.html>`__ command (`issue #4347 <https://github.com/platformio/platformio-core/issues/4347>`_)
 * Show "TimeoutError" only in the verbose mode when can not find a serial port
 * Fixed an issue when a serial port was not automatically detected if the board has predefined HWIDs
diff --git a/docs b/docs
index 31b7d077..d2d72c9a 160000
--- a/docs
+++ b/docs
@@ -1 +1 @@
-Subproject commit 31b7d077be62b407798c69ea624fc6a28ebc64ac
+Subproject commit d2d72c9a4e6c51d5bd2bd94fa7019d7bf6995565
diff --git a/platformio/device/monitor/command.py b/platformio/device/monitor/command.py
index 44df4043..0a484eee 100644
--- a/platformio/device/monitor/command.py
+++ b/platformio/device/monitor/command.py
@@ -56,9 +56,11 @@ from platformio.project.options import ProjectOptions
 @click.option("--echo", is_flag=True, help="Enable local echo")
 @click.option(
     "--encoding",
-    default="UTF-8",
-    show_default=True,
-    help="Set the encoding for the serial port (e.g. hexlify, Latin1, UTF-8)",
+    help=(
+        "Set the encoding for the serial port "
+        "(e.g. hexlify, Latin1, UTF-8) [default=%s]"
+        % ProjectOptions["env.monitor_encoding"].default
+    ),
 )
 @click.option(
     "-f",
diff --git a/platformio/project/options.py b/platformio/project/options.py
index 4c29b925..e1aa8280 100644
--- a/platformio/project/options.py
+++ b/platformio/project/options.py
@@ -567,6 +567,12 @@ ProjectOptions = OrderedDict(
                 type=click.BOOL,
                 default=False,
             ),
+            ConfigEnvOption(
+                group="monitor",
+                name="monitor_encoding",
+                description="Custom encoding (e.g. hexlify, Latin1, UTF-8)",
+                default="UTF-8",
+            ),
             # Library
             ConfigEnvOption(
                 group="library",