Most people might not be aware of this but the International Olympic Committee has actually allowed transgender people to participate since 2003. Nearly everyone is ok with transgender men competing but many see transgender women as having an unfair advantage. Perhaps to combat that belief, the IOC instituted some very specific rules around the testosterone levels in their female athletes.
Given those hormone requirements, it would seem to be a level playing field. Because where is the line drawn? For many Olympic sports, there are weight categories, which would eliminate some of the advantages. Furthermore, what about Caster Semenya? Born a woman, her body naturally produces more testosterone than the average woman. Is it fair to ban her, if she doesn’t lower her hormone levels to a “fairer” level? And if she can compete with lower testosterone levels, why can’t a transgender woman who does the same?