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 the mints of the United States... shall be fined... or imprisoned not more than five years, or both." Here the key word is fraudulently. It is illegal to tear it and piece it together to make it look like a $100, but it's not illegal to shred or burn it just for fun. It makes no actual mention of paper currency, but I assume "coins" is generalized to all currency.
It is illegal to deface currency in the United States, so it is not recommended to attempt to remove ink from a dollar bill. If the bill is damaged or defaced, it can be taken to a bank to be exchanged for a new one.
It is illegal to deface US currency, so it is not recommended to try to remove ink from a dollar bill. You should handle currency with care and avoid writing or using ink on it. If a bill is damaged or defaced, you can exchange it at a local bank for a new one.
Yes. It is illegal to deface it, because it is considered government property.
yes
No. All you'll get is a pile of ashes that used to be a $1 bill. If you think about it for, oh, a second or two, if such a bizarre story were actually true, wouldn't people all over the country be doing it, and in any case how could anyone outside of Harry Potter create magic money?
Absolutely, they'll be worth a whopping $2.00 But I cannot see how they can deface the $2 bill. By the governments rules, you can't spend that bill anymore.
It is illegal to deface public property in the state of New Jersey.
Most countries have a policy making it illegal to deface the currency of that country. I would suggest that if you intend to make a timepiece for personal use and not to make a business out of it, you should be safe.
No, but why would you want to?
Only if it belongs to someone else.
No, it is illegal to intentionally rip or deface Canadian money.
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.