We present an optical spectrum (λλ4000-10 500) of the lensed blazar B0218+357 secured at the 10 m GTC and aimed to investigate and clarify the properties of this intriguing system. We found that the emission line spectrum of the blazar is characterized by only one broad emission line that interpreted as Mg ii 2800 Å yields z = 0.95. In addition, we detect narrow absorption lines of Mg ii 2800 Å and Ca ii (H,K) and Na i 5892 Å at z = 0.68437 ± 0.00005 due to intervening interstellar gas. No stellar absorption features attributable to the lens galaxy are revealed. Thus, the assumed redshift of the lens is dubious. The continuum spectrum of the object exhibits a remarkable drop towards the short wavelengths likely due to a significant extinction. This extinction cannot be produced in the lens galaxy at z = 0.684 with any value of RV under the assumption that the intrinsic shape of the blazar is dominated by a power-law emission. However, the observed continuum is consistent with a power-law emission assuming a standard (RV = 3.1) extinction at the source redshift (z = 0.95) as supported also by the presence of Mg ii absorptions at the same redshift. HST images of B0218+357 exhibit the double image of the source together with extended image of a face on spiral galaxy. We argue that this galaxy is possibly not the lensing galaxy but the host galaxy of the blazar. This has substantial consequences on the models of the system and on the derived values of the Hubble constant.