The short answer is, it isn't. The long answer is, under 18 U.S.C. 331, "Whoever fraudulently alters, defaces, mutilates, impairs, diminishes, falsifies, scales or lightens any of the coins coined at...
Depends where you are. In most countries, it is totally illegal to deface currency. In others, it is illegal to deface them up to the point where they can no longer be used as currency.