GnuPG pinentry script for terminal or graphical interface based on $PINENTRY_USER_DATA.

.bashrc

# ~/.bashrc: executed by bash(1) for non-login shells.

# If file exists (likely) copy fragment below into existing script:

# If stdin is a terminal
if [ -t 0 ]; then
	# Set GPG_TTY so gpg-agent knows where to prompt.  See gpg-agent(1)
	export GPG_TTY="$(tty)"
	# Set PINENTRY_USER_DATA so pinentry-auto knows to present a text UI.
	export PINENTRY_USER_DATA=USE_TTY=1
fi

gpg-agent.conf

# gpg-agent configuration.  Usually ~/.gnupg/gpg-agent.conf.  See gpg-agent(1).
# Use pinentry-auto script as the pinentry program.
pinentry-program /path/to/pinentry-auto

pinentry-auto.sh

#!/bin/sh
# Choose between pinentry-tty and pinentry-x11 based on whether
# $PINENTRY_USER_DATA contains USE_TTY=1
#
# Based on:
# https://kevinlocke.name/bits/2019/07/31/prefer-terminal-for-gpg-pinentry
#
# Note: Environment detection is difficult.
# - stdin is Assuan pipe, preventing tty checking
# - configuration info (e.g. ttyname) is passed via Assuan pipe, preventing
#   parsing or fallback without implementing Assuan protocol.
# - environment is sanitized by atfork_cb in call-pinentry.c (removing $GPG_TTY)
#
# $PINENTRY_USER_DATA is preserved since 2.08 https://dev.gnupg.org/T799
#
# Format of $PINENTRY_USER_DATA not specified (that I can find), pinentry-mac
# assumes comma-separated sequence of NAME=VALUE with no escaping mechanism
# https://github.com/GPGTools/pinentry-mac/blob/v0.9.4/Source/AppDelegate.m#L78
# and recognizes USE_CURSES=1 for curses fallback
# https://github.com/GPGTools/pinentry-mac/pull/2
#
# To the extent possible under law, Kevin Locke <[email protected]> has
# waived all copyright and related or neighboring rights to this work
# under the terms of CC0: https://creativecommons.org/publicdomain/zero/1.0/

set -Ceu

# Use pinentry-tty if $PINENTRY_USER_DATA contains USE_TTY=1
case "${PINENTRY_USER_DATA-}" in
*USE_TTY=1*)
	# Note: Change to pinentry-curses if a Curses UI is preferred.
	exec pinentry-tty "$@"
	;;
esac

# Otherwise, use any X11 UI (configured by Debian Alternatives System)
# Note: Will fall back to curses if $DISPLAY is not available.
exec pinentry-x11 "$@"

I always read that environment variables should not be set in rc files but rahter in ~/.bash_profile or ~/.profile. Can we safely apply your method but just use one of these instead of ~/.bashrc?

I'm looking into favouring pinentry-curses whenever possible (when the request comes from a terminal), else use Emacs if the request comes from Emacs, and else, ultimately, use GUI.

@Kabouik If you set the environment variables in ~/.bash_profile or ~/.profile they will only be set for login shells (e.g. the shell run when you log in on a terminal or via ssh) and not for non-login shells (e.g. the shell in a graphical terminal emulator inside a Wayland or X session), as documented in Bash Startup Files section of the GNU Bash Manual. Note that variables in ~/.bashrc usually apply to both login and non-login shells since ~/.bash_profile (or ~/.profile) sources ~/.bashrc on many systems.

I'd recommend experimenting as a good way to learn and test. Try setting the environment variables in ~/.bash_profile then running echo $PINENTRY_USER_DATA in both login and non-login shells to see whether the variable is present everywhere you want it.