Please note this change does not only affect Bitlocker it affects many other security related processes within windows:
System cryptography: Use FIPS 140 compliant cryptographic algorithms, including encryption, hashing and signing algorithms
For the Schannel Security Service Provider (SSP), this security setting disables the weaker Secure Sockets Layer (SSL) protocols and supports only the Transport Layer Security (TLS) protocols as a client and as a server (if applicable). If this setting is enabled, Transport Layer Security/Secure Sockets Layer (TLS/SSL) Security Provider uses only the FIPS 140 approved cryptographic algorithms: 3DES and AES for encryption, RSA or ECC public key cryptography for the TLS key exchange and authentication, and only the Secure Hashing Algorithm (SHA1, SHA256, SHA384, and SHA512) for the TLS hashing requirements.
For Encrypting File System Service (EFS), it supports the Triple Data Encryption Standard (DES) and Advanced Encryption Standard (AES) encryption algorithms for encrypting file data supported by the NTFS file system. By default, EFS uses the Advanced Encryption Standard (AES) algorithm with a 256-bit key in the Windows Server 2003 and Windows Vista family and DESX algorithm in Windows XP for encrypting file data. For information about EFS, see Encrypting File System.
For Remote Desktop Services, it supports only the Triple DES encryption algorithm for encrypting Remote Desktop Services network communication.
Note: Remote Desktop Services was called Terminal Services in previous versions of Windows Server.
For BitLocker, this policy needs to be enabled before any encryption key is generated. Please note that when this policy is enabled, BitLocker will prevent the creation or use of recovery passwords; recovery keys should be used instead.
Default: Disabled.
Note: The Federal Information Processing Standard (FIPS) 140 is a security implementation designed for certifying cryptographic software. FIPS 140 validated software is required by the U.S. Government and requested by other prominent institutions.
If you would like to enable FIPS 140 compliant cryptographic algorithms:
Type 'gpedit.msc' into a Run box and click 'OK'
In 'Local Group Policy Editor' click 'Computer Configuration', 'Windows Settings' & 'Security Options'
Scroll down and double click on 'System cryptography: Use FIPS 140 compliant cryptographic algorithms, including encryption, hashing and signing'
Click 'Enabled' and then 'OK'