The proposals also recommend that transgender men should be allowed to play against other men. That's on the proviso they get a physical assessment and a therapeutic-exemption-use certificate and sign a statement accepting they understand the greater injury risks.
As a result, World Rugby's working group suggests that its current rules, which allow trans women to play women's rugby if they lower their testosterone levels for at least 12 months in line with the International Olympic Committee's guidelines, are "not fit for the purpose".
Individual unions have been asked to give their feedback to World Rugby in the next few months.
New Zealand Rugby's Chief Transformation Officer Nicki Nicol commends World Rugby's review.
"They certainly did a very exhaustive review and engaged with all sectors of the community because as you can imagine it's quite complex."
Nicol is keen to emphasise that it isn't a broad, blanket ban for trans women.
"As we get more information about the policy, it doesn't say that [banning]. It does look for some restrictions for some trans women, and I think we have to recognise that based on research and evidence, that's one of the recommendations of the policy."
Like the initial research conducted by World Rugby, New Zealand Rugby will engage with various stakeholders for their thoughts on the matter, from medical and legal opinions to transgender and rugby groups.
Nicol is adamant NZR is still far from making a decision.
"We haven't landed on anything yet. We're open-minded, we'll obviously try and balance fairness and equity with player welfare so that's the piece we'll navigate through."
It leaves the question of what could eventuate. Among them is a potential situation of two different sets of rules, where an individual isn't allowed to play for their country, but if a local policy is adopted, could still play at a club or domestic level.
"At a professional level, we'll have an Olympics and World Rugby set of guidelines, but we may have different or tailored guidelines here in New Zealand. We just don't know yet," says Nicol.
"We have different formats and we have different age-grades and restrictions so therefore we might be able to have fewer restrictions if that's where we end up. There are lots of different ideas of what we could do."
Nicol concedes New Zealand Rugby aren't aware how many Kiwi transgender players could be impacted by potential changes.
"It's not something we track.
"We get a small number of inquiries and all of those have been at the younger grades so it hasn't been at a higher level, which is probably where the complexity is going to come.
"What I'm proud of is we're having the conversation. We don't have all the answers, I can't tell you how to balance player welfare with ethical and other challenges because the situation is complex.
"But we're owning the conversation and trying to find a way for trans athletes to be involved in our sport."
