There are already terminals that can be used to exchange cryptocurrencies for Fiat money, for example. I think if there will be specialized banks on cryptocurrency, their ATMs will perform similar functions. I just do not understand why you need a cryptocurrency in the form of banknotes. The whole essence of cryptocurrency in this case will disappear. As cash can use fiduciary currency.
True. Bitcoin was always known to be a virtual currency and hence it's not possible nor needed to be a physical currency when the number of bitcoins are limited while there were some rare cases where people were cheating others by selling physical bitcoins which were not bitcoins but fake coins.