SQL Server Encryption with "localhost" certificate
Just for fun, I tried to do this with a wildcard certificate. The fact that anyone can do this with a self-signed certificate, for a local application, being forced to use SSL when shared memory would work much more efficiently, is kind of bogus. This adds nothing to the security of the environment.
Create A New Cert
New-SelfSignedCertificate -Subject &quot;CN=*,DC=Dublin,DC=local&quot; -KeySpec KeyExchange 
-KeyFriendlyName &quot;SQLWildcard&quot; -TextExtension &quot;2.5.29.37={text}1.3.6.1.5.5.7.3.1&quot; 
-CertStoreLocation &quot;Cert:\LocalMachine\My&quot;

Note that a FQDN of localhost and a short name of localhost both seemed to work as well. It still doesn't make anything any more secure. If anything, forcing it through the TCP stack adds in more places for filter drivers and other items to inspect and attack.
Give Permissions To The Private Key
Here I am giving the service account access to the private keys. Since most of the time SQL Server Express Edition is running as Local* account you can skip this step if you've put the cert in the local machine's MY location. Put this in for completeness.

Setting The Instance To Use The Certificate For SSL
This won't show up in the certificate picker, because the issued-to and subject don't actually match the server. Plus, if you have 3000+ instances to do this on, chances are you aren't going to do it through the GUI.
The location of the registry key is: HKLM\SOFTWARE\Microsoft\Microsoft SQL Server\*InstanceID*\MSSQLServer\SuperSocketNetLib with the value name of Certificate which takes the thumbprint of the certificate.

Double Checking
If everything went well, you'll see that the certificate thumbprint was successfully loaded for SQL Server on the next restart of the service.
The certificate [Cert Hash(sha1) &quot;F830C76FDDAC472807AF46A1C44450BBA56443D7&quot;] 
was successfully loaded for encryption.

If something went poorly, you'll see that there was a failure to initialize SSL. It will be followed by a fairly verbose output of the error code and status code which will help you in determining why the failure occurred.
Unable to load user-specified certificate [Cert Hash(sha1) &quot;ED3D2F4360780AF71ABCE83A1C3A6F3BE13E1B96&quot;]. 
The server will not accept a connection. 
You should verify that the certificate is correctly installed. 
See &quot;Configuring Certificate for Use by SSL&quot; in Books Online.

Alternate DB technologies that are out-of-process will have the same fate. You can use localhost as I explained above.