It should be as simple as
SET OutputRoot.BLOB.BLOB = CAST(MYSTRING AS BLOB);
But when I do that IIB Throws an error
An attempt was made to cast the character string ''ABC'' to a byte string, but the string was of the wrong format. There must be an even number of hexadecimal digits (0-9, a-f, A-F).
In my case I needed to change it to AS BLOB CCSID 1208 I need to read up on what CCSID means now.