He was more than three seconds faster than the Frenchman, Francis Moreau, who beat him for the gold in last year's final on an indoor track in Stuttgart.
Yesterday Wallace clocked 5min 45.333sec in beating the Dutchman, Peter Pieters, who rode 5:47.175.
Wallace complained of the pressure put on him by the monocoque bike that became the talk of the sport after carrying Chris Boardman to Britain's first Olympic cycling gold in 72 years. Wallace has requested that there is no outside pressure placed on him by well-wishers and the media until the championship is completed.
His father, Pat, said: 'He is much more relaxed now. Hopefully, anything that was going to go wrong happened in that time-trial ride.' Wallace had said that he felt nervous in his time-trial.
He meets the Lithuanian, Arturas Kasputis, today in the semi-finals, and Moreau takes on the American, Mike McCarthy. Moreau, second fastest last night, has been surprised at his performances as he had been suffering from a blood disorder. 'I also feared the potential of that British bike with Wallace in its saddle,' he said.
Garry Hibbert and Peter Boyd survived a front-wheel puncture to qualify for the amateur tandem quarter-finals but were beaten by the German world champions, Uik Pokorny and Emmanuel Raasch.Reuse content