Something like this already exists. It's not made of paper but it has a similar idea as the one described by you.
It's called OpenDime.
"Opendime is a small USB stick that allows you to spend Bitcoin like a dollar bill. Pass it along multiple times. Connect to any USB to check balance. Unseal anytime to spend online. Trust no one."
Website:
https://opendime.com/Bitcointalk Thread:
https://bitcointalk.org/index.php?topic=1452987.0Seems to be the most similar thing to what OP is searching for right now, even though it still requires a USB connection, not fully physical but seems to be the closest thing. Opendime is hardware wallet that allows you to spend your Bitcoin via a USB connection. The problem with opendime, it is much more of a one time use thing, other than something that can be reused over and over again.
I think if this idea was implemented into an ICO with the sole goal of making it renewable and relatively fast I think it would be super successful.
This is a new way of thinking, and I like it.