I made my own icon (75px by 75px) with a transparent background although it still shows white circle behind it on phone.
I made the icon within Inkscape giving it a transparent background. After importing it into android studio alongside its hdpi, mdpi, xhdpi... etc versions and opening any of them up, it clearly shows the transparent background. Although after throwing the apk onto my physical phone (not an emulator) it shows the icon perfectly except for a white circle that hides behind it. It is almost like a folder containing multiple apps although its just one.