Thank you for the \! hint, Pavel, didn't know about that!

Is it possible to have a pure SQL solution? (To avoid having to install
"sed" on my Win 10 PC)

Maybe by using EXECUTE?

EXECUTE REGEXP_REPLACE(
$localize$

CREATE OR REPLACE FUNCTION my_func()
        RETURNS text AS
$func$
        SELECT '$(placeholder)';
$func$ LANGUAGE sql IMMUTABLE;

$localize$, '\$\(\w+\)', 'English word', 'g');

Unfortunately, I get the error:

ERROR:  prepared statement "regexp_replace" does not exist

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