You can first insert data into blob field and then copy to text field with the folloing function
CREATE OR REPLACE FUNCTION blob2text() RETURNS void AS $$
Declare
ref record;
i integer;
Begin
FOR ref IN SELECT id, blob_field FROM table LOOP
-- find 0x00 and replace with space
i := position(E'\\000'::bytea in ref.blob_field);
WHILE i > 0 LOOP
ref.bob_field := set_byte(ref.blob_field, i-1, 20);
i := position(E'\\000'::bytea in ref.blobl_field);
END LOOP
UPDATE table SET field = encode(ref.blob_field, 'escape') WHERE id = ref.id;
END LOOP;
End; $$ LANGUAGE plpgsql;
--
SELECT blob2text();