I think in the old days it was used as an anti-counterfeiting technology, normally as a seal or a pattern of lines on the edges. And by the old days I mean pre-civil war, and especially in the revolutionary era.
Currently in the US, none of the notes are embossed.
As to how they are made, there are 2 different ways. The first is that during the paper production, the area with the embossing is already done, so the indentions in the paper are already put in. The 2nd, and more popular way, is by actually applying a stamp to it, like a notary stamp that punches both sides. This is how the braille is embossed on Canadian notes and how the "20" is done on current British 20 pound notes.
Currently in the US, none of the notes are embossed.
As to how they are made, there are 2 different ways. The first is that during the paper production, the area with the embossing is already done, so the indentions in the paper are already put in. The 2nd, and more popular way, is by actually applying a stamp to it, like a notary stamp that punches both sides. This is how the braille is embossed on Canadian notes and how the "20" is done on current British 20 pound notes.



















