The U.S. Treasury Department has authorized Western Union to pay remittances to people in Cuba in the island's convertible peso, or CUC, instead of U.S. dollars.

Treasury officials approved the change earlier this month, allowing Cubans to avoid a 10 percent exchange surcharge on the money transfers.   

Previously, the Treasury's Office of Foreign Assets Control required money transfers to Cuba to be paid in dollars, requiring recipients to pay the surcharge that Cuba's government imposed.  Cuban authorities applied the tax in retaliation for the longstanding U.S. trade embargo against the communist-run country.  

Cubans who rely on the remittances welcomed the decision, with one resident describing it as good news.  Many Cubans rely on remittances to supplement salaries averaging about $20 per month.

Last year, U.S. President Barack Obama eased restrictions on Cuban-Americans' travel and remittances to Cuba.

A U.S. embargo against the island remains in place.