How does WordPress store user passwords?

I have a site running 3.1 with over 40k registered users and I’ve reached a point where the platform is no longer effectively capable of dealing with the user base. Pages hang when trying to fill a select dropdown with 40k+ options and the majority of plugins just aren’t built with a large user base in mind, namely email/newsletter plugins.

I’m considering making the move to another platform (ExpressionEngine most likely) and there is the issue of user migration, passwords specifically.

How are passwords stored? I once heard they were double hashed. I’m hoping that’s not the case…

Any help would be appreciated. Thank you.