If your cat is ONLY shredding the paper, that is fine.
Some cats seem to like the feeling of destroying things, and paper is easy to destroy. I would even take advantage of its desire to shred paper by providing it with things that it's allowed to shred, and encouraging it to shred those, such as cardboard scratchers. If your cat is busy shredding and clawing those, it's a lot less likely to shred and claw your furniture and walls, and it's probably happy for being allowed to shred something.
But be careful if your cat is eating paper.
Accidentally eating a tiny piece now and then is normal for cats that shred paper, and not a concern because a tiny piece will probably pass through harmlessly. But if the cat is drawn to eating paper, that is a big health concern. Large amounts of paper will make the cat vomit, or can even get stuck in the digestive tract and cause a blockage that may even require surgery to remove. Therefore, if you notice the cat intentionally eating paper, make sure to keep all paper away from it.